India is currently examining the recent trade memorandum issued under the "America First Trade Policy" to assess its implications on bilateral trade with the United States, which remains its largest trading partner. Officials indicate that the White House's directive to the US Trade Representative (USTR) to identify potential countries for bilateral or sector-specific trade agreements is a favorable development for India.
According to sources, the government is thoroughly analyzing the memo to determine the next course of action. "At this stage, we are assessing the details, and from an initial review, there is no immediate cause for concern," said an official. However, India is awaiting the confirmation of key trade officials in the US before engaging in detailed discussions.
During former President Donald Trump's first term, India and the US had explored a "mini trade deal," but it was shelved under the Biden administration due to a lack of interest in free trade agreements. Experts suggest that the new directive could potentially revive discussions.
Meanwhile, Trump has issued a stern warning of imposing 100% tariffs on BRICS nations, including India, if they attempt to reduce the dominance of the US dollar in global trade. "If they even think about moving away from the dollar, there will be a 100% tariff," Trump stated.
Trade analysts believe India should be prepared to respond with countermeasures if higher tariffs are imposed. In 2023-24, the US remained India's top trading partner, with bilateral trade amounting to $119.71 billion, including $77.51 billion in exports and $42.19 billion in imports.
Furthermore, Trump has hinted at imposing a 10% tariff on Chinese imports to curb the influx of fentanyl-related substances, which he claims are routed through Mexico and Canada. The developments signal a potential shift in US trade policy, and India is closely monitoring the situation to safeguard its economic interest.
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