India is not significantly worse off than countries that signed trade deals with the United States even as President Donald Trump's 25 percent tariff plus penalty on Indian goods appears harsh, Global Trade Research Initiative's Founder Ajay Srivastava said.
"A deal may still emerge, but only on fair terms. For now, India’s principled stand has avoided the trap of a one-sided deal, and that’s a success," Srivastava said.
He notes that the United Kingdom (UK), European Union (EU), Japan, Indonesia, and Vietnam now face elevated tariffs, and in return, have given sweeping concessions — zero tariffs on US farm goods, massive investment pledges, and purchases of US oil, gas, and arms. India has made no such concessions.
The US President also hit out at India and China for buying oil and arms from Moscow at a time when "everyone wants Russia" to stop the war in Ukraine.
The penalty on India for buying Russian oil and arms have not been specified by Trump's administration so far.
India did not walk away from the deal, Srivastava says, adding that New Delhi negotiated in good faith but refused to cross its red lines, particularly on agriculture, where over 700 million livelihoods are at stake, he said.
Trump’s justification for the steeper duties citing India's high tariffs and non-tariff barriers, as well as ties with Russia doesn’t stand up to scrutiny.
"India’s tariffs are WTO-compliant, non-tariff barriers are common globally, and discounted Russian oil has helped India manage inflation during global volatility," Srivastava says.
He adds that India is not alone since over 90 countries face similar pressure from the US.
While India and the US have been negotiating a first tranche of a Bilateral Trade Agreement (BTA) aimed at fall of this year, efforts to agree on a mini-version by August 1 to avoid steeper reciprocal tariffs have seemingly failed.
Negotiators from the American team are expected to visit New Delhi for another round of talks only in the middle of next month.
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