Compared to major US trade partners like Mexico, China, and Canada — which collectively account for 50% of American imports — India is in a more advantageous position, according to Niti Aayog Programme Director Pravakar Sahoo.
The United States' move to impose reciprocal tariffs is unlikely to significantly impact India and may even create new economic opportunities, according to Niti Aayog Programme Director Pravakar Sahoo.
Speaking at the release of Niti Aayog's second edition of its quarterly trade watch, Sahoo noted that compared to major US trade partners like Mexico, China, and Canada — which collectively account for 50% of American imports — India is in a more advantageous position.
"We are analyzing data at a highly disaggregated level. These are preliminary findings, but the broad picture suggests that India will not suffer major losses. Except for a few specific sectors, the reciprocal tariffs will not affect us, and instead, they may open up opportunities for Indian exporters to gain market share," Sahoo said.
A detailed analysis of the impact of the US tariffs on India will be included in the next edition of the Niti Aayog report.
The US has already imposed 25% tariffs on steel and aluminum products since March 12. Additionally, from April 3, a sweeping 25% tariff on completely built vehicles (CBUs) and auto parts will come into effect. These measures are part of Washington’s broader effort to counter perceived unfair trade practices.
With US President Donald Trump’s decision to impose reciprocal tariffs on key trading partners, including India, concerns have arisen over potential disruptions. However, Sahoo emphasized that the three largest exporters to the US—Canada, Mexico, and China — will face tariffs ranging from 20% to 25%, creating an opening for Indian businesses to expand their footprint.
"If we compare our position before and after these tariffs on our competitors, India stands to benefit," Sahoo added.
A high-level US delegation, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, is currently in India for negotiations on a proposed bilateral trade agreement. These talks, expected to conclude by Saturday, aim to strengthen trade ties between the two nations.
India and the US are targeting the completion of the first phase of their trade agreement by the fall of 2025 (September- October) and have set an ambitious goal to more than double bilateral trade to $500 billion by 2030, up from the current $190 billion.
Niti Aayog member Arvind Virmani pointed out that after the US imposed tariffs on China in 2018, five countries — Taiwan, Vietnam, Thailand, Mexico, and India — gained a larger share in US imports.
Virmani suggested that India should strategically pursue trade agreements with nations that dominate global manufacturing, attract foreign direct investment (FDI), and serve as headquarters for multinational corporations.
"The most important trade partners in this context include the US, European Union, Japan, the UK, and South Korea," he said.
With shifting global trade dynamics, experts suggest that India’s ability to capitalize on emerging opportunities could be a game-changer in expanding its economic influence in US markets.
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