The 26% tariff imposed by US President Donald Trump on Indian goods has come into effect from Wednesday.
Following this, the stock market experienced a drop, reflecting growing concerns about a global trade war. The market has been falling since Trump announced the tariff last week.
In response, the Indian Union Cabinet is set to hold a key meeting today to discuss strategies for managing the impact of this decline.
India Responds with Caution
India is taking a careful approach to the situation. On the bright side, the US has excluded important sectors like semiconductors, copper, and pharmaceuticals from the tariff list.
This is significant because India supplies nearly half of America’s generic medicines. However, other major sectors such as auto parts, jewellery, and gems will be affected.
According to a report by India Today, the Indian government is in constant touch with exporters to help reduce the impact of the tariffs.
Trump has often claimed that India has misused trade relations with the US. Despite this, India is choosing not to retaliate and is focusing on managing the situation calmly.
Focus Shifts to Trade Agreement
Rather than escalating the trade tension, India is working towards strengthening its trade relationship with the US.
A bilateral trade deal was announced earlier this year during Prime Minister Narendra Modi’s visit to the US.
In March, both countries agreed to expand their trade partnership to $500 billion by 2030.
To support this effort, India has already taken steps such as lowering tariffs on US products like bourbon whiskey
and Harley-Davidson motorbikes. Additionally, the “Google tax” has been removed in India starting April 1.
