TRUMP'S TRADE TIRADE

Despite ongoing negotiations for a trade deal, India was caught unawares after the US slapped a 25% reciprocal tariff along with a 25% penalty on Indian exports. Can a deal still be signed?

- TEAM BT

INDIA WAS ONE of the early movers on initiating trade talks with the US, soon after Donald Trump took over as President in January.

But five rounds of negotiations later, it has been unable to clinch a trade deal with the US, and what's worse, it now faces tariffs of 50%, including a 25% penalty from August 27 because of the purchase of crude oil from Russia.

Faced with pressure from the US on opening sensitive sectors like agriculture and dairy, as well as scrutiny over Russian oil purchase, India has reiterated that it will protect its national interests while remaining hopeful of concluding a deal in the coming months.

For the moment, however, India has one of the highest tariff rates among the US' trading partners, on par with Brazil and a lot higher than China, which has a 30% tariff, and Vietnam with a 20% tariff rate. The US is India's largest trading partner, making it vital for New Delhi to clinch a deal soon.

Experts warn that India must brace for some short-term impact at least. After all, the competitiveness of Indian exports is at stake due to the tariff differential.