Will PM Modi’s US visit save India from reciprocal tariffs? Foreign Secretary Vikram Misri says…

Prime Minister Narendra Modi and US President Donald Trump have agreed to begin discussions on trade and tariff-related issues, Foreign Secretary Vikram Misri said on Friday.  The US President earlier ordered his administration to consider imposing reciprocal tariffs on many trading partners.

Addressing a press briefing after a meeting between Modi and Trump in the White House, the Foreign Secretary said, “We have indicated, and the two leaders have agreed today to start discussing trade and tariff-related issues.”

Donald Trump announces reciprocal tariffs

Hours before meeting Narendra Modi, Donald Trump announced reciprocal tariffs on countries, including India. He announced that the US will charge tariff on other countries based on the amount of tariff they charge on US.

A trade tariff is a tax imposed by governments on imported goods to raise revenue and protect domestic industries.

"On trade, I have decided that for the purpose of fairness, I'll charge reciprocal tariffs - meaning, whatever countries charge the United States of America, we will charge them - no more, no less. They charge us with tax and tariffs, it's very simple we will charge them with exact tax and tariffs," Donald Trump said on Thursday.

India-US to begin negotiation on tariff rows

While addressing Donald Trump administration's announcement on trade tariffs, Vikram Misri, said on Friday, "I will let those discussions start before pronouncing on what may happen with regard to the plans that have been announced today.”

‘Whatever India charges, we charge them’: Trump

After signing the memo “Fair and Reciprocal Plan” on Thursday, Donald Trump, noted that there was no favourable outcome for America after discussions on tariff reductions during his previous terms.

Underlining America's stance on “being reciprocal with India” on trade tariffs, Donald Trump said, “Whatever India charges, we charge them.”

“So, frankly, it no longer matters to us that much, what they charge. I had discussions with India in the first term about the fact that their tariffs were very high, and I was unable to get a concession,” he added.

Commenting on the friction between India and the US over the issue of trade tariff, Misri said, “We have a way forward on this issue in terms of the undertaking to discuss or start discussions on a bilateral trading agreement, and this may actually be a very good opportunity to Take forward something and conclude something which was actually foreseen in the first Trump administration.”

India-US imports

India enjoys a trade surplus with United States, which means that India exports more goods and services to America than it imports from it. India's export to US has increased significantly over the past few years. According to The Indian Express report, India's goods trade surplus increased from $17.30 billion in 2019-20 to $35.33 billion in 2023-24.

Trump's tariff goals

Trump has backed the use of tariffs to achieve economic and foreign policy goals. After his inauguration on January 20, Trump has vowed to slap reciprocal tariffs based on the difference between U.S. tariffs and those of its trading partners.
The union budget proposals on tariff cuts for bikes, including Harley Davidson, are seen as measures to placate the Trump administration's uneasiness over what it perceives as high tariffs charged by India and other nations