Commerce Ministry Reviews India-US Trade Ties Amid Trump’s Controversial Remark

As per the report, an expert suggested that if the US seeks lower customs duties for its products, India should also request similar reductions to increase market access for its goods

Trump also warned BRICS countries, including India, Russia, China, and Brazil, against any move to replace the US dollar and sought a commitment from the group

Source : PTI

The commerce ministry is reviewing aspects of India-US trade relations, focusing on the implications of statements made by US President-elect Donald Trump during his election campaign and after the results, an official said, according to a PTI report.

The official noted that there are no issues in the relationship between the two countries that would lead to discriminatory tariffs against India. During his campaign, Trump referred to India as an "abuser" of import tariffs, a claim that echoed his October 2020 statement labelling India as the "Tariff King."

Trump also warned BRICS countries, including India, Russia, China, and Brazil, against any move to replace the US dollar and sought a commitment from the group.

In light of these statements, discussions are necessary to assess trade relations, as the US is India’s largest trading partner. Trade experts have argued that Trump’s characterisation of India as an "abuser" of tariffs is unfair, as many countries, including the US, protect their domestic industries by imposing high customs duties on certain products.

According to WTO's World Tariff Profiles 2023, the US imposes high duties on various items, including dairy products (188 per cent), fruits and vegetables (132 per cent), coffee, tea, cocoa, and spices (53 per cent), cereals and food preparations (193 per cent), oilseeds, fats, and oils (164 per cent), beverages and tobacco (150 per cent), fish and fish products (35 per cent), minerals and metals (187 per cent), and chemicals (56 per cent).

As per the report, an expert suggested that if the US seeks lower customs duties for its products, India should also request similar reductions to increase market access for its goods.

The US was India’s largest trading partner in 2023-24, with India’s exports at $77.51 billion and imports at $42.2 billion. Commerce and Industry Minister Piyush Goyal recently stated that the US President is a "friend of India" and that India-US relations will continue to strengthen.

Trade relations between India and the US will likely continue to grow, regardless of the change in US leadership. According to the commerce ministry, India’s exports to the US increased to $39.2 billion in October 2023, compared to $21.46 billion in October 2015. Between 2001 and 2023, India’s exports to the US grew at a compounded annual growth rate (CAGR) of 10.48 per cent, while US imports from the world grew by 4.76 per cent.

"The India-US economic integration is growing over time, and I trust it will continue to expand," the official said in the report.

From April to October of this fiscal year, India’s exports to the US rose 6.31 per cent to $47.24 billion, while imports grew by 2.46 per cent to $26 billion. Experts have also noted that Indian exporters may face higher customs duties on products like automobiles, textiles, and pharmaceuticals if the new US administration pursues the 'America First' agenda.