India pushes for a new trade deal with US

New Delhi — As US President Donald Trump pauses his trade war with some of that country’s allies, India says it will immediately increase scrutiny on low-cost imports.

India seemed to want to move quickly on a trade deal with the US, a government official said on Thursday, after Trump’s decision to pause reciprocal tariffs on dozens of countries, while hiking levies on China.

India and the US agreed in February to work on the first phase of a trade deal to be concluded late this year, with a view to reaching two-way trade worth $500bn by 2030.

A trade deficit with many of the US’s biggest allies has been among Trump’s biggest gripes since taking office in January.

Trump’s trade war caused upheaval in the US economy, erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields.

“India is one of the first nations to start talks over a deal with the US and to have jointly agreed to a deadline to conclude it,” said the official, who spoke on condition of anonymity because of the sensitivity of the issue.

India’s trade ministry, which is leading the talks with the US, did not immediately respond to an email seeking comment.

India’s trade minister was also on record saying earlier this week that manufacturers in that country and the US had suffered from China’s unfair trade practices over the years.

India would raise scrutiny on imports to spot any potential dumping of goods, including from China, the official said on Wednesday, Trump temporarily lowered duties on trading partners, including India, just 24 hours after imposing tariffs that unleashed the most intense market volatility since the early days of the Covid-19 pandemic.

Shifting the focus back to a bilateral trade war with China, Trump said he would raise to 125% the tariff on imports from China.

The US reciprocal tariff on India stands at 10%. The decision to halt further tariffs was especially a relief for Indian shrimp exporters, the official said, citing an industry that faced a tariff disadvantage compared to competitors like Ecuador.

Nearly $14bn worth of electronics products and more than $9bn worth of gems and jewellery were also among the sectors affected by the US tariffs.

Ajay Sahai, director-general at the Federation of India Export Organisations, representing more than 37,000 exporters, said the 90-day pause gave Indian negotiators time to work on concluding a bilateral trade deal with the US.

“The US appears determined to hit China hard, and if it wants to ensure a non-disruptive supply of goods to its consumers while keeping inflation in check, India remains one of the most reliable suppliers,” Sahai said.

Reuters