US tariffs unlikely to impact India, may create opportunities: NITI Aayog

Niti Aayog Programme Director Mr. Pravakar Sahoo stated that the US plan to impose reciprocal tariffs will have a limited impact on India and may present opportunities for the country. Unlike major US trade partners such as China, Mexico, and Canada, India is relatively well-positioned, which faces tariffs ranging from 20-25% and accounts for 50% of US imports. While specific sectors might face minor challenges, the overall impact is expected to be minimal. A more detailed analysis will be presented in the next edition of Niti Aayog's quarterly trade watch. 

Furthermore, the US has imposed 25% tariffs on steel, aluminium, vehicles, and auto parts, impacting several trade partners. Despite previous tariffs on China in 2018, India, Taiwan, Vietnam, Thailand, and Mexico benefited by increasing their share in US imports. Ongoing bilateral trade negotiations between India and the US aim to finalize the first phase of an agreement by fall 2025, aiming to more than double bilateral trade to Rs. 42,78,000 crore (US$ 500 billion) by 2030. Given their strong manufacturing and FDI potential, Niti Aayog member Mr. Arvind Virmani suggested strengthening trade ties with major economies like the US, EU, Japan, UK, and South Korea. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.