India Prioritizes Domestic Industries While Engaging in Bilateral Trade Negotiations with the U.S.
Is Trump Misrepresenting India’s Position on Tariffs?
Former U.S. President Donald Trump recently claimed that India had agreed to reduce tariffs. However, India has denied this assertion, clarifying that no such agreement has been reached. Trump had earlier stated that India had consented to lowering tariffs, while Indian officials maintain that discussions are still ongoing, with a resolution expected by September. Notably, Trump had previously threatened to impose tariffs starting April 2.
No Agreement Yet on Tariff Reduction
India’s Commerce Secretary, Sunil Barthwal, informed the Parliamentary Standing Committee on External Affairs that no agreement has been reached between India and the U.S. regarding tariff reductions. He emphasized that both countries are working towards a broader bilateral trade agreement, focusing not only on immediate tariff issues but also on long-term trade cooperation.
Several committee members expressed concerns over Trump’s claim that “India has agreed to reduce tariffs.” Opposition MPs such as Asaduddin Owaisi, Congress leader Deepender Hooda, and TMC’s Sagarika Ghosh questioned the government’s stance. In response, Barthwal urged them not to believe Trump’s statements or media reports, emphasizing that negotiations between the two nations are still ongoing. He further clarified that India has made no formal commitments to the U.S. regarding tariff reductions.
Could a Tariff War Trigger a Recession?
Sources indicate that committee members raised multiple questions regarding India-U.S. trade discussions. Barthwal reassured them that India’s interests would be protected during negotiations. He emphasized that India supports free trade and trade liberalization, which would benefit both countries. However, he cautioned that a tariff war would not be advantageous for any nation, including the U.S., and could potentially lead to an economic slowdown.
Why Isn’t India Protesting Like Canada?
Some MPs questioned why India was not protesting against U.S. tariff policies as strongly as Mexico and Canada. Barthwal explained that the situations are not comparable, as U.S. relations with Mexico and Canada involve national security and border immigration concerns, which differ from India’s trade dynamics with the U.S.
India’s Trade Strategy
Barthwal reiterated that India would safeguard industries crucial to its domestic economy. While India may agree to reduce tariffs through bilateral negotiations, it cannot make such concessions on a multilateral level. Hence, discussions for a bilateral trade agreement are still underway.
