Amid tariff-for-tariff response from Canada, China, Mexico, India takes a cautious route in trade war

NEW DELHI: The ministry of exterior affairs on Friday addressed the tariff imposition menace from US President Donald Trump from April 2. The MEA stated the nation meant to “reduce tariff and non-tariff barriers” with the intention to “deepen India-US two-way trade”.
Amid stern response from Canada, China and Mexica, who’ve imposed reciprocal tariffs on the States and have additionally filed a criticism with the World Trade Organisation, India, in its cautious response stated, “Our objective through the BTA is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries.”
Trump has repeatedly stated that India is a high-tariff nation and has expressed his intentions to tug off a tit-for-tat. “And the big one will be on April 2, when reciprocal tariffs, so if India or China, or any of the countries that really…India is a very high tariff nation,” he stated on Friday.
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The MEA response comes in amid reviews of Trump administration pushing for India’s consent to get rid of tariffs on car imports as a part of a proposed bilateral trade deal. However, India stays cautious about bringing the duties all the way down to zero instantly, although it’s open to contemplating potential reductions, sources instructed Reuters.
India imposes import duties of as much as 110% on automobiles, a tariff Tesla CEO Elon Musk has criticized as one of many highest globally. The steep duties beforehand prompted the electrical automobile large to shelve its plans to enter India’s car market, the third-largest in the world.
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According to the assume tank GTRI, rising trade obstacles current India with a possibility to discover different sourcing choices, notably from Canada, the place key commodities might now be extra competitively priced.
Canada performs a important position in supplying important imports that align with India’s high-demand sectors. Earlier in 2024, the US imported substantial volumes of crude petroleum oil ($103 billion), refined petroleum oil ($12.9 billion), and fertilizers ($3.1 billion) from Canada, highlighting its robust export capability.
India’s personal import wants are vital throughout key commodities, together with crude oil ($140.3 billion), gold ($42.5 billion), copper ($2.8 billion), ethylene polymers ($2.2 billion), plastics ($1.3 billion), and fertilizers ($1.3 billion). With Canada already exporting copper cathodes ($1.3 billion), gold ($4.3 billion), ethylene polymers ($2.2 billion), and plastics ($2.1 billion), it may emerge as a key provider for India’s rising demand.
It famous that escalating trade tensions may work in India’s favor by boosting exports and attracting better American investments. Srivastava highlighted that in his first time period, Trump scrapped NAFTA in favor of the USMCA in 2018-19, arguing that the older settlement was outdated and dangerous to American staff.