India’s Strategic Decision on US Tariffs: No Retaliation Planned
India plans to refrain from retaliating against Trump’s tariffs, focusing on early trade talks as a strategic advantage. The government sees opportunities for a favorable trade deal with the US, while taking steps to mitigate potential economic impacts on key industries.
India appears poised to refrain from retaliating against United States President Donald Trump’s 26 percent tariff on imports from the nation. According to an unnamed Indian government official, ongoing negotiations between the two countries offer a strategic advantage, particularly since India has initiated early trade talks with Washington, distinguishing itself from regional competitors such as China, Vietnam, and Indonesia who are experiencing greater impact from these tariffs.
The official noted that the Indian government is considering a provision within Trump’s tariff order that may provide relief to trading partners willing to take significant measures to address non-reciprocal trade practices. As a result, India has joined countries like Taiwan and Indonesia in opting not to impose counter tariffs, even as the European Commission prepares to levy additional duties on American products following China’s response.
India’s efforts to resolve tariff tensions are ongoing, with both nations having established a target to finalize a trade agreement by autumn 2025. In pursuit of easing trade relations, the Indian administration led by Prime Minister Narendra Modi has made concessions, including reducing tariffs on specific high-end products and abolishing a digital services tax that adversely affected American technology firms.
However, some economists have cautioned that Trump’s tariffs could hinder India’s economic growth by 20 to 40 basis points within the current financial year. There is also a concern regarding the diamond industry, which relies heavily on the US market for over one-third of its exports, putting numerous jobs at risk due to the tariff’s financial pressures.
In summary, India has decided against retaliating to the US tariffs imposed by President Trump, as it seeks to maintain favorable trade negotiations. By initiating talks early and making concessions to the US, India positions itself strategically amidst competition from other Asian countries. Nevertheless, potential economic impacts from these tariffs pose serious concerns, particularly for key industries like diamond exports.
Original Source: www.hindustantimes.com
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