US reciprocal tariffs: India can plan some 'easy wins' for Trump to mitigate larger impact

New Delhi: With the US reciprocal tariffs likely to come into effect from April 2, India needs to pursue negotiations by offering concessions in some key sectors, which would not hurt domestic industry but are important politically or economically for US President Donald Trump in exchange for tariff mitigation elsewhere, a report suggested on Thursday. In the fast-changing global trade dynamics amid Trump’s "love for a deal", Emkay Global Financial Services identified some "easy wins" for India, like increasing energy (crude oil, natural gas) imports from the US, enhancing defence purchases and co-operation, reducing tariffs on certain agri/food commodities and lowering tariffs on foreign electric vehicles (EVs).

Emkay Global Financial Services Ltd's Chief Economist Madhavi Arora said that the broad sector-level reciprocal implementation is the most probable outcome on April 2, given complications around sector or commodity level tariff assessments across the value chains. "India will need to strive harder to gain market share in this new leg of the global trade war. At the end of it, our view is that the tariff will not be a big blow to India, as the negotiations will be fruitful, with a slight impact on overall Indian exports to the US," she said. As for tariffs on Mexico and Canada, there are some export opportunities (refined petroleum, auto components), but the integrated nature of North American supply chains means that any gains, if at all, will take time to accrue to India. Trump has said that he expects India to lower tariffs substantially, but will go ahead with his plan to charge a reciprocal rate. "I believe they’re going to probably going to be lowering those tariffs substantially, but on April 2, we will be charging them the same tariffs they charge us," he said last week. Union Commerce Minister Piyush Goyal also visited Washington this month and spoke to US Trade Representative Jamieson Greer and US Commerce Secretary Howard Lutnick in a bid to stave off the tariff hikes.