How will India react to Trump's tariffs? Supriya Sule seeks answer from Centre

Supriya Sule

Partaking in the discussion on the Union Budget in Lok Sabha, NCP (Sharad Pawar faction) MP Supriya Sule sought answers from the Union government on how India is looking tackle sweeping tariffs that are in the offing by the Trump administration.

The Baramati MP, lauding the Union Budget for income tax related announcements, requested the finance minister to look into the issue of GST compensation, an issue that saw several state governments lock horns with the Centre.

President Donald Trump on Monday announced that the United States will impose 25 per cent tariffs on all steel and aluminum imports, including from Canada and Mexico, as well as other import duties later in the week. The latest sweeping tariffs on foreign metals come after Trump imposed an additional 10% tariff on all products from China that came within hours of taxing Canada and Mexico.

Trade analysts are of the view that Trump's 25% tariff on steel and aluminium imports may increase competition for Indian exporters. This move could push Chinese steel into markets like Southeast Asia and the Middle East, causing price pressures. India might face increased steel imports and lowered steel prices due to this global shift in steel market dynamics.

Additionally, experts opine that Trump's move will mean Indian exports to countries such as South East Asia and Middle East will face price pressures as Chinese steel may increase outflow to these markets. The other threat is a possible rise in imports of Chinese steel to India, driving down domestic prices.

According to media reports, right after Trump's victory last year in November, New Delhi had begun a detailed sector-wise analysis, drawing up multiple scenarios, to prepare for a possible increase in tariffs on product exports to the US under the Trump administration.

Multiple media reports also say that the Centre has asked key stakeholders within India Inc. for inputs on the possible negative and positive impacts of US President Donald Trump's tariff announcements. A blueprint could be prepared ahead of Prime Minister Narendra Modi’s upcoming visit to the US, and India is trying its best to leverage its existing relations with Washington.