DONALD DUCKS

US PRESIDENT DONALD TRUMP'S 'RECIPROCAL' TARIFFS HERALD A NEW GLOBAL TRADE WAR. INDIA IS HOPEFUL THAT A BILATERAL TRADE PACT COULD OFFSET SOME OF THE PAIN. BUT DOES THE 90-DAY PAUSE GIVE INDIA TIME TO WORK ON NEW MEASURES TO BOOST MANUFACTURING AND TRADE?

- BY SURABHI

VANIJYA BHAWAN, LOCATED RIGHT NEXT TO INDIA GATE AMIDST LUSH GREEN TREES AND A PANORAMIC VIEW OF LUTYENS' DELHI, HOUSES THE UNION MINISTRY OF COMMERCE AND INDUSTRY. IN RECENT DAYS, IT HAS SEEN A FLURRY OF ACTIVITY AS OFFICIALS NEGOTIATE TRADE DEALS WITH OVER 10 COUNTRIES, INCLUDING THE US. THIS COMES AMID US PRESIDENT DONALD TRUMP'S SALVO OF "RECIPROCAL" TARIFFS FOR MOST COUNTRIES. THOUGH PAUSED FOR NOW, IT WARRANTS CLOSER SCRUTINY OF INDIA'S FOREIGN TRADE SITUATION AND A CALIBRATED POLICY RESPONSE.

EXPORTS WERE ONE of the four key engines for the Indian economy outlined by Finance Minister Nirmala Sitharaman in Budget 2025-26, but trade dynamics have since become the topmost priority for New Delhi in light of an increasingly uncertain global environment and new dynamics that bring in fresh volatility into the mix almost every other day.

The tariffs, announced by Trump on April 2 and put on hold for 90 days on April 9, could trigger a recession in the US if and when they kick in, devastate global trade and economic growth prospects, and cast a shadow even on economies like India that have strong domestic drivers.

For India, trade and exports have become an increasingly important part of its economy.

The country has set a target of reaching $2 trillion in exports by 2030 with $1 trillion each of merchandise and services exports— as it aspires to become a global manufacturing hub. The share of goods exports is just 12% of the GDP as of now, compared with 20% for China.