Chat bubbles of USA and India isolated on white. 3D illustration
| Photo Credit:
MikhailMishchenko
Amiti Sen
India has the “first mover advantage” in dealing with US President Donald Trump’s tariffs as it is the only country that is already negotiating a bilateral trade agreement (BTA) with the US, government sources said.
Simultaneously, a number of “important” countries have reached out for negotiating free trade agreements (FTAs) with India which was a good thing as it would lead to market diversification, the source added.
“When other countries were speculating about whether the US will actually impose reciprocal tariffs on its trade partners, India went ahead and started negotiations on a BTA. So it now has the first mover advantage against its competitors. Now other countries, too, are saying that they want to negotiate with the US,” the source said.
Although India is keen to get into a BTA with the US, it would not agree to anything less than a fair, equitable and balanced agreement, which leads to a win-win situation, the source added.
On whether India can protect its sensitive sectors such as dairy, the source said that it could as the US too had sensitive items it wanted to protect such as peanut butter.
Neighbours too hit
Compared to reciprocal tariffs of 26 per cent imposed on Indian goods, many of its competing Asian neighbours have been charged with higher tariffs such as China with 34 per cent, Vietnam with 46 per cent, Taiwan with 32 per cent, Cambodia with 49 per cent, Bangladesh with 37 per cent, Indonesia with 32 per cent and Malaysia with 24 per cent.
However, India is vulnerable in products such as shrimps where competitor Ecuador has lower tariffs or in gems and jewellery, a luxury product, where the 26 per cent tariffs could make the item unaffordable.
Many important countries have reached out to India to negotiate FTAs, with seven negotiations active at the moment with partners such as the EU, the UK, Peru, Oman and Chile. “Countries such as Bahrain and Qatar are also in talks for an FTA with India,” the source said adding that this was good for India as it would help it diversify its markets.
The US is India’s largest trading partner and export destination, with exports of goods at $77.51 billion and imports at $42.19 billion in FY24.
Published on April 5, 2025