INDIA-US TRADE: TRADE TIED

PM Modi's meeting with US President Trump has boosted hopes of deeper trade and investment ties between the two countries. But the US' plan to levy reciprocal tariffs may endanger that

- BY SURABHI

► PRIME MINISTER NARENDRA MODI'S four-hour long meeting with US President Donald Trump on February 13, yielded substantial gains for India. This includes a broad agreement to deepen bilateral trade ties and double it to $500 billion by 2030, as well as negotiate a bilateral trade agreement in the coming months.

However, just hours before that crucial meeting, Trump announced a new system of reciprocal tariffs on trading partners of the US and said India is among the highest tariff nations, underscoring it with his grievance over customs duties India imposed on Harley Davidson motorbikes. India's trade and industry have welcomed the discussions on deepening bilateral trade ties—after all, the US is India's largest trading partner and biggest export market. But experts are worried about what the reciprocal tariffs would entail.

A White House memo on Reciprocal Trade and Tariffs has said the administration will counter non-reciprocal trading arrangements including not just tariffs but also "unfair, discriminatory, or extraterritorial taxes" including value added tax, non-tariff barriers and unfair or harmful acts as well as policies around exchange rates.

Abhijit Das, former head of the Centre for WTO Studies at the Indian Institute of Foreign Trade, says it is very difficult to quantify the impact of the reciprocal tariffs, but it will likely be negative.