Mar 28, 2025 09:15 PM IST
A report by Barclay’s Chief India Economist Aastha Gudwani analysed Indo-US commerce and means that India would possibly take a cluster-wise method to the negotiations
NEW DELHI: With days left earlier than US President Donald Trump broadcasts reciprocal tariffs on April 2, Indo-US commerce negotiations proceed to happen. Will India drastically convey down its tariffs to deal with Donald Trump’s criticism of Indian tariffs being too excessive? Will the reductions be throughout the board or commodity particular? A report launched by Barclay’s Chief India Economist Aastha Gudwani has analysed Indo-US commerce intimately and means that India would possibly take a cluster-wise method to the negotiations.
FILE – President Donald Trump speaks to reporters as he indicators government orders within the White Home. (AP)
US’s commerce deficit with India has elevated considerably, however it’s nonetheless comparatively small in comparison with others
Information from US Bureau of Financial Evaluation (BES) reveals that US’s commerce deficit with India was rising constantly between 1999 and early 2010s after which it has stabilised. India’s share in US’s whole items and providers commerce deficit elevated from lower than 2% within the 2000s to succeed in a peak of greater than 6% within the early 2010s however has stabilised at round 5% within the 2020s. To make certain, India remains to be a small participant so far as US’s total commerce deficit in involved. US’s commerce deficit of $ 46.1 billion with India was simply 5.02% of its total commerce deficit in 2024.
However India imposes one of many highest tariffs on US imports regardless of going through decrease tariffs within the US
The Barclays report reveals that in comparison with different nations in South East Asia, India imposes a lot increased tariffs on merchandise imported from the US. Not solely that, India’s tariffs on US imports can be a lot increased than tariffs that the US imposes on Indian exports. This distinction is far decrease for Thailand, Philippines, Taiwan, Vietnam and different nations.
Nonetheless, the Indo-US tariff distinction shouldn’t be the identical throughout items
That is an important evaluation within the Barclay’s report. It has regarded on the distinction between tariffs imposed by India and US on particular items in keeping with their significance in India’s export basket to the US. The distinction is important (ten proportion factors) for a few of India’s most necessary exports to the US equivalent to pharma merchandise ($6.5 billion) and gems and jewelry ($5.9 billion), very excessive for exports of comparatively decrease significance and never so vital for some commodities equivalent to petroleum merchandise.
The report makes use of this information together with India’s bargaining energy – a operate of whether or not or not India is a giant provider of those merchandise – to categorise India’s exports into 4 classes from India not needing to barter from the US to discovering it tough to barter. For merchandise through which India is the highest exporter to the US, India could not want to barter in any respect and will have the best bargaining energy. Merchandise within the ‘relatively easy to negotiate’ class are these for which India is the second largest exporter, the place India nonetheless has comparatively excessive bargaining energy. Merchandise for which India is the third largest exporter are reasonably tough to barter and India might have low bargaining energy. The ultimate class is one the place India will discover it ‘difficult to negotiate’ the place India shouldn’t be among the many prime three suppliers for the US. These are the merchandise that are at most danger of going through reciprocal tariffs, as per the report.
Information / Enterprise / Barclay’s report dissects Indo-US commerce and tariff negotiations
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