India is looking at a mutually beneficial multi-sector bilateral trade agreement with the United States amidst American President Donald Trump’s threat of imposing reciprocal tariffs.CompanyValueChange%ChangeGovernment sources have told CNBC-TV18 that India’s tariffs exist due to its lower per capita income than developed economies, current manufacturing capacity, and an aggressive neighbourhood with excess export capacity.
Describing trade deficit, unfair trade practices, and the aim to bring back jobs and manufacturing as the key reasons behind the US’s actions, sources pointed out that costly products will also imply higher costs for American consumers.
Stating that most of India’s tariffs on American products are reasonable, sources termed trade diversion a natural phenomenon, indicating that it won’t be a cause for concern if India starts buying more crude from the US instead of Russia.With the US undertaking country-specific investigations to determine the reasons behind its trade deficit, sources added that it will be difficult to pinpoint where such an action would impact trade.ALSO READ: Non-tariff barriers hurt trade 2.5 times more than tariffs: Govt sources(Edited by : Anand Singha)
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