India in wait and watch mode: Official on possible impact of Trump tariffs from August
The official added that the Indian team is in Washington for the fifth round of negotiations on the proposed
bilateral trade agreement
(BTA).
"Any backup or plan has to be prepared after we know the full effect of US tariffs. Today on July 15, we are not in a position to guesstimate the differential tariff that is going to play out on August 1.
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"We have got tariff numbers for about 25 countries....the US has announced that they are going to do trade deals in two weeks. So, what do these deals lead to, and what will be the final spectrum of tariffs that will be rolled out on August 1, without understanding that, it will be very difficult to plan for a contingency plan. So that is something we need to wait and watch," the official said.
The government official was replying to a question whether India is preparing any backup plan to deal with the impact of Trump tariffs.
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In February, India and the US announced that the two countries would negotiate a BTA. The two have fixed a deadline to conclude the first phase of the pact by fall (September-October) of 2025.
In March, both sides finalised the Terms of Reference (ToRs) of the agreement. After that, there were two rounds of discussions in April and June.
Negotiators also met in early July. The fifth round of talks started on Monday.
India's chief negotiator, Special Secretary Rajesh Agrawal will be joining the team on Wednesday. The talks are expected to continue till Thursday.
These negotiations come in the midst of US President Donald Trump issuing letters to individual countries and economic blocs notifying them of the tariffs the US will impose on their shipments to America after August 1.
While unilaterally imposing tariffs, the US has left the door open to negotiations for all the recipients.
The US has sent letters to 24 countries and the European Union (EU).
"We need not worry much. We should wait for it (US duties) to play out and as soon as it plays out, the government can come out with something to see what best needs to be done for the country," the official said.
On whether India has a differential tariff advantage over other countries, the official said at present, there is a 10 per cent baseline tariff line across the world, except for China, which has an additional 40 per cent Fentanyl tariff.
So that is the only differential, a country has today. China has got a higher tariff vis-a-vis others. In addition, there are sectoral tariffs on iron, steel (50 per cent) and auto components (25 per cent).
"If you look at tariffs today, other than China, there are only announcements of tariffs. So, relative positions have not changed much. Despite that India is doing well in exports," another official said, adding that whether the differential tariffs come into play from August, one does not know.
"That is something we need to wait and watch. We are in the same boat as others," the official said.
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