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This signals the government's willingness to shed India’s representation arsenic a high-tariff economy. However, further reductions whitethorn beryllium necessary, arsenic conscionable hours earlier gathering Modi, Trump announced reciprocal tariffs connected each countries.
Amid a whirlwind of US tariff threats, adding uncertainty to planetary trade, Prime Minister Narendra Modi is acceptable to conscionable US President Donald Trump successful an effort to avert a tariff warfare and support marketplace entree to the largest export destination for a scope of Indian goods—from labour-intensive products specified arsenic garments to capital-intensive goods similar electronics and engineering products.
With basal customs work (BCD) cuts introduced connected much than 2 twelve items successful the Union Budget, the mean customs work has been reduced from 11.66 per cent to 10.66 per cent. This signals the government’s willingness to shed India’s representation arsenic a high-tariff economy. However, further reductions whitethorn beryllium necessary, arsenic conscionable hours earlier gathering Modi, Trump announced reciprocal tariffs connected each countries.
India’s imports from US concentrated successful 5 items
India’s imports from the US implicit the past 5 years person grown astatine a slower gait compared to its exports. US exports to India reached $42.19 cardinal successful 2023-24, up from $35.81 cardinal successful 2019-20, with the bulk concentrated successful 5 categories: mineral fuels (the largest segment), followed by precious and semi-precious stones, atomic reactors, electrical machinery, and craft and parts.
While astir items imported from the US bash not pull precocious tariffs—duties connected the apical 30 imported goods, including crude oil, LNG, coal, diamonds, and aeroplanes, scope from 0 per cent to 7.5 per cent—high-end cars and centrifugal vehicles person historically been taxable to higher BCD. However, these rates were reduced successful the Union Budget.
In the automobile sector, India has lowered tariffs connected motorcycles based connected motor capacity. The tariff connected motorcycles with an motor capableness beneath 1,600cc has been reduced from 50 per cent to 40 per cent, portion for those supra 1,600cc, it has been slashed from 50 per cent to 30 per cent.
Notably, US motorcycle exports to India stood astatine $3 cardinal successful FY2024, and this tariff chopped could assistance grow marketplace entree for American manufacturers, according to the deliberation vessel Global Trade and Research Institute (GTRI).
India’s goods commercialized surplus with the US doubled successful 5 years
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India’s goods commercialized surplus with the US has been rising, peculiarly aft the COVID-19 pandemic, doubling from $17.30 cardinal successful 2019-20 to $35.33 cardinal successful 2023-24, alongside a notable displacement successful the export basket. While exports of physics and engineering goods surged, accepted exports specified arsenic gems & jewellery and garments remained mostly unchanged.
The astir important translation has occurred successful electronics exports, driven successful portion by tariffs imposed by the US during Trump’s archetypal term.
A study from Oxford Economics past twelvemonth examined the interaction of the US-China commercialized warfare during Trump’s archetypal term, highlighting that US commercialized rerouting was peculiarly pronounced successful the ample electronics market, wherever China’s stock had dropped by 19 percent points since 2017.
“India’s stock successful US electronics imports
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India’s goods commercialized surplus with US doubled successful 5 years |
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| Year | Exports to US |
Imports from US |
Trade surplus | ||||||
| 2023-24 | 77.52 | 42.19 | 35.33 | ||||||
| 2022-23 | 78.31 | 50.86 | 27.45 | ||||||
| 2021-22 | 75.6 | 43.31 | 32.29 | ||||||
| 2020-21 | 51.63 | 28.88 | 22.75 | ||||||
| 2019-20 | 53.11 | 35.81 | 17.3 | ||||||
| Value successful $bn | |||||||||
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Source: Commerce and Industry Ministry |
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Top 5 imports from US * |
Top 5 exports to US ** |
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*comprise 60% of full imports from US (2023-24) |
** comprise 67% of full exports to US (2023-24) |
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| Items | Value ($bn) | Items | Value ($bn) | ||||||
| Mineral fuels & oils | 12.96 | Engineering Goods | 17.62 | ||||||
| Precious, semiprecious stones | 5.16 | Electronic Goods | 10.49 | ||||||
| Nuclear reactors, boilers | 3.75 | Gems And Jewellery | 9.9 | ||||||
| Electrical Machinery | 2.3 | Drugs And Pharmaceuticals | 8.72 | ||||||
| Aircrafts and parts | 2.25 | Petroleum Products | 5.83 | ||||||
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Source: Commerce and Industry Ministry |
Ravi Dutta Mishra is simply a Principal Correspondent with The Indian Express, covering argumentation issues related to trade, commerce, and banking. He has implicit 5 years of acquisition and has antecedently worked with Mint, CNBC-TV18, and different quality outlets. ... Read More
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