India Worries as Trump Threatens New Tariffs, Reports BBC
India is nervously watching as former US President Donald Trump returns to power, bringing his tough trade policies back into focus. The BBC reports that India has recently cut import taxes on motorcycles and other goods, hoping to avoid Trump’s tariff threats.
Last week, India reduced tariffs on heavyweight motorcycles from 50% to 30%, and on smaller bikes from 50% to 40%. This move is seen as an effort to make it easier for US-made Harley-Davidson motorcycles to enter the Indian market. India hopes this will keep Trump from imposing new tariffs, but experts aren’t sure if it will be enough.
During his first term, Trump often criticized India’s high tariffs, calling the country a “tariff king” and a “big abuser” of trade. He particularly disliked India’s 100% tax on Harley-Davidson bikes, which he called “unacceptable.” Now, with Trump back in the White House, India is trying to stay ahead of the game by lowering tariffs on other products too, like satellite equipment, synthetic flavors, and fish feed.
India and the US have a strong trade relationship, with bilateral trade reaching over $190 billion in 2023. India exports a wide range of goods to the US, including medicines, textiles, and engineering products. However, India still enjoys a trade surplus with the US, meaning it sells more to the US than it buys from it. This could make India a target for Trump’s “America First” policy, which focuses on reducing the US trade deficit.
The BBC highlights that India has a history of being a protectionist economy, with high tariffs to shield its industries. In the 1990s and 2000s, India opened up its economy, cutting average tariffs from 80% to 13%. But under Prime Minister Narendra Modi’s “Make in India” campaign, tariffs have risen again to about 18%, higher than many other Asian countries.
Trade expert Biswajit Dhar told the BBC that India could face challenges, especially in agriculture. While India has dropped retaliatory tariffs on US almonds, apples, and other farm products, Trump may demand more access to India’s agricultural markets. However, farming is a sensitive issue in India, and the government may resist further concessions.
Despite these tensions, India’s strategic relationship with the US could help ease trade friction. As a member of the Quad alliance, India is seen as a key partner in countering China’s influence. Additionally, India’s willingness to accept the deportation of undocumented Indian migrants from the US has been seen as a positive gesture.
The BBC notes that Modi’s personal rapport with Trump could also play a role in smoothing relations. The two leaders are expected to meet at the White House soon, which may provide more clarity on the future of US-India trade.
In summary, India is taking steps to avoid Trump’s tariff threats, but the road ahead remains uncertain. While tariff cuts on motorcycles and other goods are a start, India may need to make more concessions to keep trade tensions at bay.
Credit : BBC
https://www.bbc.com/news/articles/cn93eyp5r2zo