New Delhi: India has a strategic opportunity to transform the US reciprocal tariff threat into a mutually beneficial trade deal, according to 16th Finance Commission Chairman Arvind Panagariya.
Speaking at the 49th Civil Accounts Day, Panagariya emphasized that instead of engaging in a tariff war, India should push for reciprocal tariff reductions to secure better access to the US market.
“Now that the reciprocal tariff threat is coming, we can turn it into a win-win situation by ensuring that the US also lowers tariffs on Indian exports,” he stated.
The remarks come amid President Donald Trump’s repeated accusations of India being a “tariff king” and “tariff abuser.” The US has already imposed a 25% tariff on steel and aluminum imports effective March 12, impacting Indian exporters.
India-US Trade Relations at a Crossroads
In 2023, bilateral trade between India and the US stood at $190.08 billion, with a trade surplus of $43.65 billion in India’s favor. India’s merchandise exports to the US totaled $83.77 billion, while imports stood at $40.12 billion.
Panagariya pointed out that India’s economic liberalization since 1991 has made its industries more competitive, making a tariff bargain an opportunity rather than a threat. However, he warned that a retaliatory tariff battle could be detrimental to both nations.
With the India-US Bilateral Trade Agreement (BTA) talks set to begin, Panagariya’s insights highlight the need for a strategic approach to trade negotiations rather than reactive measures.
