Raghu Gururaj
This week, India and the US finalized the terms of reference for the impending negotiations on a free trade agreement. The roadmap is expected to be guided by an integrated approach toward lowering tariffs and non-tariff barriers, better market access and a robust enmeshed supply chain.
The “Liberation Day” tariffs announced by Donald Trump on April 2 cannot be more shackling for most countries, including India. The effects of Trump’s 26% tariff on India will not only significantly hurt Indian exports but will cast more than a shadow of doubt on its ability to adapt quickly to the realignment of global supply chains, which Trump’s draconian tariffs seek to alter fundamentally.
As the situation evolves, the quantum of tariffs and counter-tariffs has been reduced to mere numbers. Hopes for a fast US-China deal to resolve trade tensions have all but evaporated.
The 90-day pause on reciprocal tariffs, except for China, which faces a whopping 145% tax, is a breather for most nations. But no government would dare make long-term plans in this uncertain situation. In some sense, global trade is being rewritten in real-time.
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