India received a heads up from US on tariffs

India received an advanced notice on the reciprocal tariffs announced by President Donald Trump on April 2 with the United States officials explaining there could be no exceptions and suggesting New Delhi’s reactions be suitably tempered in keeping with ongoing US-India trade talks.

The “discount” on tariffs imposed on India is a recognition that discussions on a bilateral trade agreement are making headway, sources familiar with developments said. India is pressing on with BTA discussions having established a “fast mover” advantage in the light of Prime Minister Narendra Modi’s visit to Washington early in Trump’s second term in office.

The presence of a US negotiating team in India just days ahead of the “Liberation Day” announcement indicates the seriousness of the engagement and stood in contrast with the Trump administration’s contacts with many other national governments. India is keen to close the gap with the US to arrive at a mutually beneficial arrangement that balances the give and take.

The trade discussions are “on track” and India will calibrate its public responses while deciphering the precise impact of the tariffs. The US decision to exempt pharma, for example, is rooted in the recognition that India is a significant supplier of generic and branded products that US may need to stabilise domestic prices.

In a recent instance, egg prices shot up in the US following an incidence of bird flu and the rise was contained with the help of imports from countries like Turkiye, Brazil and South Korea. The Trump administration would need to be sensitive to inflation caused by the tariff policy and tweak it to ensure price of essential items, particularly food products, does not shoot up.

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