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The commerce and industry ministry is undertaking a paragraph-wise review of the executive order issued by Trump last week on the trade policy that entails the US identifying countries with which it can negotiate agreements bilaterally or on a sector-specific basis.
US also warns of supplemental tariffs on trade partners to correct America’s trade deficits.
“A detailed review of the executive order is being held to analyse any implication for India,” said an official.
The review assumes significance with Trump asking Prime Minister Narendra Modi to move towards a fair bilateral trading relationship and buy more America-made security equipment. Modi is likely to visit the US next month.
The US’ trade deficit with India was above $35 billion in FY24.
Review WTO Agreements
It is India’s top trading partner with New Delhi exporting goods worth $77.5 billion in FY24.Trump has said that high-tariff countries such as India, China, and Brazil “harm” America and that Washington would impose taxes on other countries to bring money into the US. He also threatened the BRICS bloc of 100% tariffs if it moves forward with plans to replace the US dollar.
As per the America First Trade Policy, the US will “review the impact of all trade agreements including the WTO on government procurement… to ensure that such agreements are being implemented in a manner that favours domestic workers and manufacturers, not foreign nations”.
“The US’ policy of becoming a manufacturing hub is similar to India’s Atmanirbhar Bharat. India will have to take a calibrated approach as the US has said earlier that its exporters encounter tariff and non-tariff barriers in the country,” said a Delhi-based trade expert.
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