New Delhi:
Republican Donald Trump is once again going to become the President of the United States, but how to see it from India’s point of view. If we talk about the mutual relationship between Prime Minister Narendra Modi and Trump, there is a lot of warmth. The two leaders have met three times so far. The first meeting took place in June 2017, when PM Modi went to Washington DC. The second meeting took place during the ‘Howdy Modi’ event in Houston in September 2019, and the third and last time the two leaders met in February 2020, when Trump visited India.
Indian Prime Minister Narendra Modi always calls Donald Trump his ‘friend’. Many pictures of the two leaders hugging each other, laughing and joking are seen, but such conversations between two heads of state are never private or personal, because both are accountable for their respective countries. Every word, every policy of both is for their country. This is the reason why despite such closeness with PM Modi, Donald Trump has been very aggressive regarding trade duty on India. He has called India from ‘Tariff King’ to ‘Trade Abuser’.
In the end, it is understood that along with the mutual friendship and understanding between the leaders of the two countries, what also matters is the policies of the two countries towards each other. Therefore, whether Donald Trump winning the presidential election is good or bad for India cannot be answered only in yes or no. To understand this, we have to understand Trump and his policies.
Trump aggressive on India regarding tariffs
Even in this presidential election, Donald Trump had talked about imposing reciprocal tax against India. During one of his speeches, Trump had said that when it comes to tariffs, America is quite liberal, but countries like China, Brazil and India impose very high tariffs. India imposes the highest tariff. American companies have described the high taxes imposed in India as a challenge.
Trump also claims that India trades with 10 nations, it has a trade deficit with 9, that is, there is a loss in trade, meaning exports are less and imports are more, but the opposite is true with America, its exports are more and imports are more. are less. In his first term, Trump had appealed to India in 2018 to reduce the tax on the import of Harley Davidson motorcycles.
He had said that he would increase the tax on motorcycles coming from India. After this, India reduced the import duty on imported motorcycles from 75 percent to 50 percent. Although Trump was still not happy, he said that America will not get anything from this because it imposes zero tax. Trump, who gave the slogan of ‘America First’, promised the American people that if he comes to power, he will impose higher taxes not only on China but also on India. This is a very negative comment from India’s point of view.
When it comes to global trade, it is clearly visible that Trump is a supporter of protectionism. He wants to promote domestic manufacturing, increase domestic employment, there is nothing wrong in this, every country wants and does the same, but America’s trade partners, including India, may have to suffer the consequences of this. With Trump’s arrival, the fear increases that he may increase tariffs on India’s exports.
trade between india and usa
Bilateral trade between India and America has increased in the current Biden administration. America is also India’s biggest trade partner. The annual trade between these two great nations has reached more than 190 billion US dollars. During FY20 and FY24, India’s merchandise exports to America have increased by 46 percent to US $ 77.5 billion, which was earlier US $ 53.1 billion. India’s imports from America have also increased by 17.9 percent during this period from 35.8 billion US dollars to 42.2 billion US dollars. Trade in services between the two countries has increased by 30 percent from 2018 to US $ 70.5 billion by 2024.
There is no doubt that America is a huge market for India. India exports technology, pharmaceutical, engineering and textile products to America. Now in such a situation, if Donald Trump shows any trade strictness with India and imposes high tariffs, then these sectors of India may be adversely affected, demand from America may decrease and Indian companies may have to suffer huge losses.
Trump has imposed heavy tariffs on India
Now it is difficult to say whether Trump will do this or not, but remember the year 2018, when the Trump administration had imposed 25 percent tariff on import steel and 10 percent tariff on aluminum, due to which within a year India’s steel exports had fallen by 46 percent, the steel sector had to suffer a loss of about 240 million US dollars. Trump did not stop here, he also removed India from the Generalized System of Preferences (GSP) in the year 2019, due to which India’s exports suffered a blow of US $ 560 crore.
In response, India imposed retaliatory tariffs on 28 products exported from America from June 16, 2019. However, in the year 2023, the Biden administration resolved the dispute and agreed to remove the duties on steel and aluminum that were imposed by the Trump administration. After this, India also removed retaliatory tariffs on products like pulses, walnuts, almonds, apples. Then trade between the two countries went on peacefully.
Now that Donald Trump is once again returning to power, the question that comes up again and again is whether he will once again impose the burden of tariffs on India. If yes, then the trade balance between the two countries may deteriorate.
