Trade Twist! US Deficit Shrinks Overall But Bloats With India, Vietnam, And Mexico: SBI Report
United States has finally signed a new trade agreement with Japan, it has raises concerns in India ahead of its August 1 deadline for the US-India tariffs. There is a pressure mounting on India regarding a fresh round of negotiations in order to avoid potential increase in tariffs.
President Donald Trump has recently announced the US-Japan deal and agreed on a 15% reciprocal tariff on exports to the US. The export comprises automobiles, while promising $550 billion in Japanese investment into American businesses.
India has a strategic economic relationship with the US which shares a complex multidimensional business association. Trump has already warned several countries regarding the completion of the deals by August 1. Failing which the country face tariffs of up to 50% on select goods.
According to the US Census Bureau, India majorly exports pharmaceuticals, textiles, gems, and technology services to the US. However, aircraft, energy products, and industrial machinery are among the top categories of Imports to India.
India’s Key Export Sectors Could Be Exposed
Indian pharmaceutical and textile industries are the major contributors to the trade surplus with the US. The new tariff may immensely affect the industry across dimensions. The automotive sector could also come under increased pressure, given that Japan has effectively managed to negotiate slightly lower 15% tariff on car parts compared to the 25% rate still applied to other nations.
The current status of the delay in bilateral trade deal means crucial Indian industries could soon face higher costs when exporting their products to the markets in US.
Strategic Partnerships May Influence Timing
From a couple of years, India-US ties in the defence sector have taken a new shift. India has significantly expanded its strategic ties over decade. Whether these developments will translate into a favorable trade agreement remains uncertain.
Ankur Mishra is a journalist who covers an extensive range of news, from business, stock markets, IPOs to geopolitics, world affairs, international crises, and general news. With over a decade of experience in the business domain, Ankur has been associated with some of the reputed media brands. Through a sharp eye on global marketplaces along with deep insights and analysis of business strategies, Ankur brings simplicity to the complex economic matrix to decode market trends and empower people.
He is committed to entrenched data, facts, research, solutions, and a dedication to value-based journalism. He has covered trade tariff wars, international alliances, corporate policies, government initiatives, regulatory developments, along with micro- and macroeconomic shifts impacting global fiscal dynamics.
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