Can India turn US tariff threat into ‘win-win discount’? Arvind Panagariya says it can

NEW DELHI: India can turn the potential threat of reciprocal tariffs from the US into its favour if it can use the state of affairs to barter mutual tariff reductions, mentioned the chairman of the sixteenth finance fee Arvind Panagariya on Saturday.
“We have a very good opportunity to do a win-win bargain. So we can really turn it into a win-win situation. Now that the reciprocal tariff threat is coming, it is doubly beneficial that we also, in the process, hold the United States to reciprocal tariff reductions as well, and get access for our goods that we export to them,” Panagariya mentioned.
Speaking on the forty ninth Civil Accounts Day, Panagariya highlighted India’s robust alternative for a mutually helpful settlement on reciprocal tariffs. “Our own (economic) liberalisation (in 1991) makes us more competitive, forces us to become more efficient and in that process, if we were to do a reciprocal tariff bargain, we can also get better access to the US market,” he mentioned.
“We can turn it (reciprocal tariffs) into a positive. If it ends up in a kind of tariff war in which the US hits us with tariffs and we hit back on the US with tariffs, that outcome will be kind of unfortunate. That will not be to the advantage of either side,” he added.
US President Donald Trump has repeatedly mentioned that America will impose reciprocal tariffs on India, accusing the nation of being a “tariff king” and a “tariff abuser.” The US has already introduced a 25% tariff on metal and aluminum, set to take impact on March 12, impacting Indian exports of those items.
In 2023, US-India bilateral commerce in items and providers reached $190.08 billion, comprising $123.89 billion in items and $66.19 billion in providers. India’s merchandise exports to the US totaled $83.77 billion, whereas imports stood at $40.12 billion, leading to a commerce surplus of $43.65 billion for India. Additionally, India’s providers exports to the US amounted to $36.33 billion, with imports totaling $29.86 billion.