India holds fire as Trump announces tariffs
(Source – The Hindu, International Edition – Page No. – 1)
|
Context |
|
Global Reactions and Market Impact
-
Countries like China, the EU, and Canada strongly reacted, warning of countermeasures.
-
Global stock markets dropped sharply; India’s Sensex lost over 300 points and the U.S. indices fell significantly.
India’s Response
-
India issued a measured response, stating it is examining the implications and consulting stakeholders.
-
India still aims to raise bilateral trade with the U.S. to $500 billion by 2030.
Tariff Details and Exceptions
-
A 10% general tariff will start from April 5, and higher individual tariffs on countries with large trade deficits will begin from April 9.
-
Some countries, including Russia, were not included in the tariff list.
Impact on Indian Industries
-
India’s jewellery exports may face challenges as the U.S. accounts for 30% of the sector’s market.
-
Auto and auto parts sectors are unlikely to be affected, while aerospace may face supply chain disruptions.
Comparative Advantage for India
-
India received a lower tariff rate than other Asian exporters, possibly giving it some relative trade advantage.
|
Practice Question: Discuss the implications of the U.S. imposing reciprocal tariffs on Indian exports. How should India recalibrate its trade strategy in response? (250 Words /15 marks) |
