India US Trade Talks: The tension between India and America due to tariffs (fees) is continuously increasing. The US government has recently imposed a high tariff of up to 50 percent on Indian goods exports, including 25 percent base tariff and additional 25 percent punitive fee. This additional fee has been levied by the US in the form of penalty imposed by India on purchasing crude oil from Russia.
However, after some positive indications received by US President Donald Trump recently, the talks between the two countries have started again. Earlier many rounds of talks were inconclusive, but now the situation seems to be changing.
NITI Aayog CEO BVR Subrahmanyam on Monday expressed confidence that India and the United States will soon have a mutually beneficial trade agreement. He said that both countries are committed to a bilateral agreement that is in the interest of the economies of both.
India needs to open its market: Subrahmanyam
Subrahmanyam said that India should reduce its fees and non-tariff barriers and make markets more open to increase competition in manufacturing sector. He made this statement during the release of ‘Trade Watch Quarterly’ report. He said, “The good thing is that both sides are still committed to the conversation. The talks were held last month, so we hope that we will get positive results soon.”
Significantly, in August, the US doubled the tariff over Indian goods to 50 percent. It also includes tariffs in the form of 25 percent panalty imposed to buy oil from Russia. After this move, tension between Delhi and Washington increased.
India described this American step as “inappropriate and indiscriminate”. Subrahmanyam said that these fees will not have a major impact till Christmas, but if there is no agreement by November, then there may be a serious impact in the export sector.
Economic shock will be deferred with agreement
He said, “We are currently in harm… 50 percent of our goods become expensive, which is difficult to stay in competition. But if the trade agreement is reached by November, then big disruption can be avoided.” Subrahmanyam also added that India’s trade deficit is still manageable, but there is an imbalance in it.
Overall, this tariff confrontation between India and the US is a challenge for both economies – but if the conversation moves in the right direction, the new trade agreement between the two countries can prove to be a positive sign in the global market.
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