Indo-US Trade: If the new US administration decides to pursue the ‘America First’ agenda amidst the events of Donald Trump becoming the US President, Indian exporters may have to face higher custom duties on goods like vehicles, textiles and pharma. Financial experts have expressed this opinion.
Experts said that Trump can also tighten H-1B visa rules, which will affect the cost and growth of Indian IT companies. More than 80 percent of India’s IT export income comes from America. If there is a change in visa policies then India becomes sensitive towards it. America is India’s largest trading partner. India’s annual trade with America is more than 190 billion dollars.
What do financial and trade experts say?
Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), said that after China, Trump can now impose duty on India and other countries also. Trump had earlier called India a ‘big tariff abuser’ and in October 2020 had called India a ‘tariff king’. He said these comments show that Trump’s second term could bring difficult trade negotiations.
Ajay Srivastava said his America First agenda would likely emphasize protective measures, such as reciprocal tariffs on Indian goods, which could potentially raise barriers to key Indian exports such as vehicles, liquor, textiles and pharma. This increase could make Indian products less competitive in the US, which could impact revenues in these sectors. However, he said that America’s tough stance towards China can create new opportunities for Indian exporters. Bilateral trade in goods between the two countries stood at $120 billion in 2023-24, while it was $129.4 billion in 2022-23.
What do international trade experts say
International trade expert Biswajit Dhar said that Trump will increase tariffs in various sectors and with Trump coming to power, we are going to enter a different era of protectionism. He said that it could have an impact on sectors like electronics.
He said that as Trump has already pulled out of the Trans-Pacific Partnership (TPP), dark clouds may hang over IPEF (Indo-Pacific Economic Framework for Prosperity). This block of 14 countries was launched by the US and other countries in the Indo-Pacific region on May 23, 2022 in Tokyo. Ajay Sahay, Director General of the Federation of Indian Export Organizations (FIEO), said that we can expect Trump to press for more balanced trade. But trade disputes may arise regarding fees. Sahay said that in view of the increasing trend of protectionism, this trend will continue with stricter immigration rules.
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