CEA Nageswaran sees India-US tariff dispute being resolved in '8-10 weeks'

Chief Economic Adviser V. Anantha Nageswaran on September 18 said he expected the tariff dispute between India and the United States to be resolved within the next two months. Addressing the Bharat Chamber of Commerce in Kolkata, Nageswaran said conversations between the two governments were progressing and a resolution was likely soon. “My hunch is that in the next eight to ten weeks, we will likely see a solution to the penal tariff imposed by the US on Indian goods,” he said.

The United States had, in August, imposed an additional 25 percent tariff on Indian exports, effectively doubling the levy on some goods to as much as 50 percent. The action, widely linked to India’s continued import of Russian crude oil, has already started to weigh on trade flows. Exports to the US fell to 6.86 billion dollars in August from 8.01 billion dollars in July, while India’s overall merchandise exports dropped to a nine-month low of 35.10 billion dollars in August from 37.24 billion dollars the previous month.

Nageswaran also signalled that the outcome of talks may include the moderation of reciprocal tariffs by the US, which India had anticipated earlier. “My personal confidence is that in the next couple of months, if not earlier, we will see a resolution to at least the extra penal tariff of 25 percent. It may also be the case that the reciprocal tariff may come down to the level, which we were earlier anticipating, somewhere between 10-15 percent,” he said.

The prospect of penal tariffs being rolled back and reciprocal duties reduced could provide considerable relief, particularly as global demand remains subdued.