NEW DELHI: With the sword of high tariff hanging over its head, the government believes that the issue of reciprocal tariff and Bilateral Trade Agreement with the US can be dealt with separately.
Commerce ministry officials told TNIE reciprocal tariffs planned by the Trump administration will have little impact on the Bilateral Trade Agreement goals set by the two governments. An official on the condition of anonymity said the two countries’ have agreed to achieve mutually beneficial bilateral trade agreements, which will go for reduction of tariffs on both sides.
“Reciprocal tariffs, which the US will impose, are under a law which they have introduced in their Congress, and the Bill is with the select committee. If the Bill is passed into the Act, it empowers the Congress as well as the President to go for exploring tariffs. That is a different issue, which has not yet been announced against any particular country,” says the official.
Another government official said the proposed reciprocal tariff would not come in the way of achieving goals set out under the bilateral trade agreement (BTA) reached by Prime Minister Modi and US president Donald Trump. The bilateral agreement targets $500 billion trade between the two countries. Currently, the trade between two countries is $200 billion. The statement issued by India and US on February 13, 2025 plans to negotiate the first tranche of a mutually beneficial, multi-sector BTA by fall of 2025. India’s exports to the US in April-January rose by 9%.
“We will hold discussions with the US team once negotiating teams are in place and then develop the contours of this mutually beneficial BTA,” said one of the officials. When asked if India could challenge reciprocal tariffs in WTO, the official refrained from answering the question. On the US insistence on reducing trade deficit with India, an officials said the US is looking at reducing their trade imbalance with many countries, and India is at a much lower hierarchy now.