India looks nervous because Trump tariffs increase the danger
Last week, India reduced imported duties on motorcycles, with an engine above 1,600cc cut tariffs on heavyweight bikes 50% to 30% and 50% to 40% smaller.
A prior-khali step designed to smooth the entry of Harley Davidson into India-and, Delhi expects any threat to tariff. US motorcycle exports in India were priced at $ 3m last year.
Donald Trump has marked his return to the White House by branding business measures against its large rival China along with US neighbors and colleagues.
India hopes that it is ahead of the game – but will its tariff cuts satisfy Trump, or is the business action still on the table?
Ajay Srivastava, founder of Delhi -based Think Tank Global Trade Research Institute (GTRI), says, “Canada and Mexico are truly two weapons of America. If they have worked against them, they can easily work against India, “Ajay Srivastava, the founder of Delhi -based Think Tank Global Trade Research Institute, says.
In his phone conversation at the end of last month, the US President pressured Prime Minister Narendra Modi to buy more American weapons and to balance there.
And during his first term, Trump corrected India’s standing tariff. He repeatedly slammed the then 100% duty on Harles as “unacceptable”, making him a rally point in his crusade against everything he saw as unfair trade practices.
In the past, he repeatedly branded India a “tariff king” and a “big addict” of business relations.
India enjoys a trade surplus with the US, its top trading partner. In 2023, bilateral trade crossed $ 190BN (£ 150BN). Business exports for us increased by 40% to $ 123bn since 2018, while the services trading increased by 22% to $ 66BN. Meanwhile, American exports to India were $ 70BN.
But beyond the bike, India has reduced import taxes on satellite ground installation, which benefited US exporters, who supplied $ 92M worth $ 92M in 2023.
Tariffs on synthetic flavering essences fell from 100% to 20% ($ 21m in US exports last year), while for aquatic feed, fish on hydrolyzetes 15% to 5% in duties ($ 35M in US exports in 2024) Went. India also left tariffs on selected waste and scrap items, a category where American exports were $ 2.5BN last year.
Top American exports in India in 2023 included crude oil and petroleum products ($ 14bn), LNG, coal, medical equipment, scientific equipment, scrap metal, turbojet, computer and almonds.
“While Trump has criticized India’s tariff policies, the latest cut indicates a policy change that can increase American exports in various fields,” Sri Srivastava.
“With significant tariff cuts on technology, automobiles, industrial and waste imports, India is taking steps towards facilitating trade, even the global trade environment remains stressful.”
Meanwhile, India’s exports expands a diverse range – from textiles, pharmaceuticals and engineering goods to petroleum oil, machinery and cut diamonds. It also ships smartphones, auto parts, shrimp, gold jewelery, shoes and iron and steel, making it a major player in global trade.
“This diversity of products reflects India’s broad export base and its strong trade relations with the US,” says Shri Srivastava.
India was once among the most conservationist economies in the world. In the 1970s, American political scientist Joseph Grieco described it as one of the “most restrictive, cumbersome … regulating foreign direct investment”.
This in-arrival approach caused India’s steady decline in export stake of global trade, from 2.42% to just 0.51% from 2.42% to 1991 in 1948. Asema Sinha, Author of Globalization India: How Global Rules & Markets have shaped India’s growth in power, observed, this period was marked by “a self-propelled industrialization drive, export pessor and doubt of global alliances” .
India finally opened in the 1990s and 2000s, cutting the average tariff from 80% in 1990, 13% in 2008.
But Modi again climbed up to 18% compared to those set by other Asian countries like China, South Korea, Indonesia and Thailand after launching their “Make in India” policy to promote manufacturing in India. Is.
Business expert Biswajit Dhar believes that India is now a major target under Trump’s “US First” policy, which demands mutual action against high import taxes and re -motivates trade with large US deficit Is.
The use of the agricultural market is a sticky point for the US, they say.
India dropped the anti-produced almonds on American-made almonds, apples, chickpeas, pulses and walnuts in 2023, but Trump will probably demand more. However, India can catch the firm in view of domestic political sensitivity around farming.
“This is where we will run a tough deal, and problems can arise,” Mr. Dhar took care.
He said, India’s strategic relations with the US – as a quad member who fights China – can help reduce friction. India’s desire has also sent a positive sign, without accepting the exile of Indian migrants unspent in the US in America.
Experts also indicate Modi’s warm personal coordination with Trump as a profit. Some clarity will come when Indian Prime Minister visits the White House – this month, according to some reports – at Trump’s invitation.
