While the new tariffs might bring some challenges, India has a chance to make the most of the situation if it handles the trade negotiations wisely.
Trump’s Tariffs: Ashok Gulati, a prominent Indian agricultural economist and professor at the Indian Council for Research on International Economic Relations (ICRIER), recently shared his insights on how new tariffs imposed by US President Donald Trump might affect India’s agricultural exports. According to Gulati, India is unlikely to face major losses due to these tariffs. He also believes that with smart negotiation in trade talks, India could even gain some ground.
Impact on Agricultural Products
Gulati pointed out that the impact of the tariffs won’t be the same for every agricultural product. The final outcome depends on various factors, including how the US applies tariffs to India and its competitors. As per the new US tariff policy, Indian agricultural exports to the US are currently subject to a 27% tariff. However, this isn’t the whole story. What matters is how India’s tariffs compare to those faced by competing countries.
For example, if India’s rice is subject to a 26% tariff while competitors like Vietnam and Thailand face even higher duties, India could benefit. In contrast, if these competitors face lower tariffs, India could lose market share in the US. Gulati emphasized that the effects will vary across different agricultural commodities. He explained, “The impact of Trump’s tariffication is going to be quite varied across different agri-commodities. To estimate the likely impact, one needs to look at not only tariff rates on Indian exports (26%), but also on the tariff rates on competing countries’ exports to the US.”
Strategic Negotiation Is Key While Handling Trump’s Tariffs
While the tariffs could create challenges, Gulati remains optimistic. He believes that India may not lose much in the agricultural sector overall. “If competing countries face lower tariffs than India, then India may lose in that product exports. But overall, it seems India may not lose much in agriculture,” he said.
Gulati stressed the importance of strategic negotiation in these situations. According to him, if India negotiates wisely during bilateral trade agreements (BTA) with the US, it could turn the tariff challenge into an opportunity. “But if we negotiate smartly in the BTA, we may gain,” he added.
India has a chance to make the most of the situation if it handles the trade negotiations wisely. Gulati’s message is clear: while the tariffs may not spell disaster for Indian agriculture, the key to success lies in effective and strategic negotiation.
(With Inputs From ANI)
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