India assesses impact of Trump 2.0 trade policy, reviews bilateral agreement positive

India is currently assessing the impact of Donald Trump’s America First trade policy and does not see the need for immediate action on that front, according to people familiar with the matter.

Officials from various ministries are holding talks about the impact of Trump’s tariff threats and new trade policies. He also considers the US Trade Representative’s identification of countries for agreements as positive for India given the long-term trade relations with these countries.

Officials are also expected to hold talks on gaining access to export markets for Indian products, while they are also eyeing trade official appointments in the US.

The US is India’s largest trading partner, with bilateral trade in goods worth $119.7 billion, exports worth $77.5 billion and imports worth $42.2 billion. India has a trade surplus of about $35.3 billion with the US.

Since his oath-taking, Trump has raised alarm bells across all geographies with moves such as threatening tariffs on BRICS countries, withdrawing from the global tax accord as well as the Paris Agreement.

According to GTRI trade expert Ajay Srivastava, if Indian goods or services are targeted, India should respond strongly – something it has done successfully in the past.

For example, in March 2018, when the US imposed tariffs on Indian steel and aluminium, India retaliated by increasing tariffs on 29 specific US products. This response was carefully calibrated to ensure that India collected equal revenue from US imports as the US did. From Indian steel and aluminium,” he said.