India and the United States relationship has been making headlines for a while. The strong relationship between India and the USA recieved complexities due to the recent developments of the tarrif policies. This can also reshape the entire ecnomic ties between the nations. Here’s the in depth India-US Complex Tariff report on the trade relationships between these two nations.
India and the US have a significant trade relationship which is valued at $129.20 billion as of the report of 2024. This partnership extended the scope to various sectors, including technology, pharmaceuticals, agriculture, and steel in various aspects. Both nations aim to double bilateral trade to $500 billion by 2030, as outlined in their “Mission 500” initiative.
Tariff Disparities Between India and the US
One of the most important and crucial challenges faced by the trades is the significant difference in average tariff rates among the different countries. India imposes an average tariff of 17%, while the US maintains a much lower average of 3.3% in the trades they facilitate. This disparity is even more was eve extended to pronounced in agriculture, where India’s average tariff is 39%, compared to the US’s tarrif which is valued at 5.5%.
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Impact on Key Sectors
The major impact of the tarrif balance changes between the nations are expected to be on these industries respectively.
Steel and Aluminum: The US has imposed a 25% tariff on steel and aluminum imports, directly affecting Indian exporters and in turn impacts on Indian economy.
Smartphones: Reciprocal tariffs on the electronics could increase costs for Indian smartphone exports to the US, potentially reducing the demand and growth with time.
Pharmaceuticals: Pne of the major exports from India to the US is Pharma, And the Proposed tariffs on pharmaceutical imports may challenge India’s position as a major exporter of medicine.
The US tariffs imposed on Chinese goods are going to make more opportunities for Indian exporters, particularly in electronics, textiles, and engineering due to the relations. By capitalizing on these openings, Indian businesses can strengthen their foothold in the global market.
India and the US are negotiating a Bilateral Trade Agreement (BTA) to address tariff disparities and enhance trade relations without affecting the economy of both the nations. Additionally, Indian exporters are encouraged to explore alternative markets without relying on one or a few major exports.And also to leverage Free Trade Agreements (FTAs) with regions like the UK, EU, and Gulf countries to survive in the same pace.
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