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Informist, Tuesday, Jul. 15, 2025

--Govt source: Trade deal to have clauses on future tariff threats from US 
--Govt source: Watchful of situation if US rolls out country-wise tariff 
--Govt source: Can't deny risk element in trade dynamics with US 
--Govt source: Not wary of exports until US implements reciprocal tariffs 
--Govt source on US tariff: Situation too uncertain for contingent plan now 

NEW DELHI – The government is not currently wary of risks to India's exports until the US implements reciprocal tariffs on New Delhi, a government official said, acknowledging that the government is watchful of the announcements coming from the White House. The US reciprocal tariffs on trading partners are set to take effect on Aug. 1. 

"We are aware of the risk element attached here," the official said. But the situation is too uncertain right now to make a contingency plan, the official said. "Until we understand how the tariffs affect India's exports once they are effected, we cannot make a contingent plan." 

Ever since US President Donald Trump first announced his plan to impose reciprocal tariffs on major trading partners, the Indian government has been counting on a trade deal with the US, proposed in February. Washington had unveiled its reciprocal tariffs in April, whose implementation was initially paused till July, which has now been extended till Aug. 1. 

As the deadline approaches, a delegation from the commerce ministry is in the US trying to expedite negotiations for an interim deal before the new tariffs take effect. The discussions for the agreement will also include clauses for future tariff threats from the US, the official said. Trump has threatened to impose extra tariffs on the BRICS bloc and those nations that import from Russia. India qualifies for additional tariffs under both categories.

Trump has been sending letters to nations informing them about the reciprocal tariffs since last week, but has not yet sent a letter to India. Trump had, on Apr. 2, announced a 26% reciprocal tariff on India, but it is not clear whether the US will stick to it. The duty mentioned in the latest tariff letters sent to some countries so far is different from what was unveiled in April.

If imposed, the reciprocal tariffs may significantly hurt India's exports, as the US is India's top export destination with nearly 20% share in total outbound shipments. India exported goods worth $86.51 billion to the US in 2024-25 (Apr-Mar) and had a trade surplus of $40.82 billion during the year, according to commerce ministry data.  End

US$1 = INR 85.81

Reported by Krity Ambey

Edited by Saji George Titus

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