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The Commerce Ministry has stated that domestic exporters may benefit if the United States imposes specific tariffs on goods from these countries. Explaining the distinction between reciprocal tariffs and the principles of reciprocity, the Ministry clarified that the former pertains to MFN (Most-Favoured Nation) tariffs applicable to all countries, while the latter refers to tariffs specific to certain countries.
As the US aims to reduce its overall trade imbalance, the Commerce Ministry highlighted that India ranks low in terms of trade imbalance with the US, compared to China, Canada, and Mexico, which have much larger imbalances. The Ministry further explained that the reciprocal tariffs proposed by the United States are not targeted at any specific country. The bill, currently under consideration by a select committee, would empower the US Congress and President to impose reciprocal tariffs if passed.
A significant achievement of Prime Minister Narendra Modi’s recent visit to the US has been an agreement to negotiate a mutual bilateral trade agreement to reduce tariffs on both sides. India plans to begin working with the US in the coming weeks to outline a mutually beneficial trade agreement based on principles of fairness.
The recent India-US joint statement on trade set an ambitious goal of increasing bilateral trade from the current $200 billion to over $500 billion by 2030. The first tranche of the multi-sector bilateral trade agreement is targeted for completion by the fall of 2025. Both countries aim to collaborate on increasing US exports of industrial goods to India and Indian exports of labor-intensive manufactured products to the US. The Commerce Ministry also indicated that India’s $4 billion worth of agricultural exports to the US could grow, along with overall trade in the sector.
In 2023, India-US bilateral trade in goods and services stood at $190.08 billion ($123.89 billion in goods and $66.19 billion in services), with India enjoying a $43.65 billion surplus in merchandise exports and a $6.47 billion surplus in services exports.
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