Signs of relief in trade ties
Chief Economic Adviser (CEA) V Anantha Nageswaran on Thursday expressed optimism that the penal tariffs imposed by the United States on Indian imports may be withdrawn after November 30.
He mentioned the ongoing conversations between New Delhi and Washington are moving towards a resolution that could ease trade tensions.
India’s economic outlook on tariffs
Nageswaran noted that both the original reciprocal tariff of 25% and the additional penal tariff of 25% had strained trade ties. He also suggested geopolitical circumstances led to the second round of tariffs.
Nageswaran predicted that in the next eight to ten weeks, a solution can be drawn to the tariffs imposed by the US on Indian goods.
The tariff saga
Donald Trump’s administration imposed a total of 50% duties on Indian goods after imposing additional 25% tariffs, effective from August 27. The second round of tariffs were miffled by India’s oil trade with Russia.Â
However, a US Appeals Court later ruled that Trump’s move under the International Emergency Economic Powers Act (IEEPA) overstepped presidential authority. The Supreme Court will take up the case in early November.
Road ahead for India–US relations
With positive exchanges between Trump and PM Modi in recent weeks and legal scrutiny in the US, there is growing optimism that the penal tariff may be scrapped, offering relief to India–US trade relations.
