The Government of India has announced it has no intention of enforcing retaliatory tariffs in response to the United States’ recent 26% tariff on Indian exports, a move introduced under former President Donald Trump’s trade policy.
According to a report by Reuters, an Indian government official disclosed that New Delhi is instead prioritizing continued trade negotiations with Washington, aiming for a mutually beneficial trade agreement.
“We are engaged in meaningful discussions, and we believe this positions us well compared to other nations affected by the same tariffs,” said the official, who requested anonymity.
India is reportedly analyzing a clause within the US’s latest “reciprocal” tariff policy. This clause provides relief for trade partners that “undertake significant measures to address non-reciprocal trade frameworks.”
India Confident in Its Negotiation Edge
Sources suggest that India’s swift response and diplomatic engagements give it a favorable standing compared to Asian counterparts such as China, Vietnam, and Indonesia, who have faced the brunt of US tariff escalations.
For instance, China has already responded with a 34% retaliatory tariff on American goods, intensifying trade tensions. However, India’s approach appears more strategic, aiming to strengthen its trade relationship with the US rather than escalate the situation.
An internal government source emphasized that India’s early and proactive discussions could spare it from the harsher implications seen by other export-driven economies.
Global Reactions Vary
While India, Indonesia, and Taiwan may sidestep reciprocal tariffs through diplomacy, the European Union could consider a more assertive stance, possibly setting the stage for broader geopolitical trade shifts.
For context on international trade dynamics and reciprocal tariffs, visit this external resource by the World Trade Organization.
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