AS THE 10 per cent ‘baseline’ US reciprocal tariffs took effect Saturday, a top government official said India holds a comparative edge over other manufacturing competitors and also benefits from a first-mover advantage, having initiated trade negotiations with the US early on. The official said that overall demand in the US may be affected by the new tariffs, but said India’s low manufacturing costs and lower commodity prices currently work in the country’s favour. While the 10 per cent baseline tariff took effect Saturday, individual tariffs on other countries, including India, are set to be effective from April 9. US President Donald Trump announced a 26 per cent reciprocal tariff on India, but higher tariffs on China, Vietnam, Thailand, and Indonesia — key hubs of manufacturing activity in Asia, triggering fears of dumping in India. Addressing concerns about dumping due to a glut in Chinese exports and the potential diversion of Chinese products to India, the official said India is closely monitoring the situation and will act “within the legal framework” to protect its domestic industry. The Indian Express had reported Saturday that a high-level meeting had taken place at the Commerce and Industry Ministry to assess the situation with fears of a potential surge in imports in the backdrop of the reciprocal tariffs. “Necessary action will be taken. The Customs department and the Bureau of Indian Standards (BIS) are vigilant,” the official said. Trade negotiations The government official reiterated that India is proactively negotiating a trade deal with the US and that “everything is on the table”. Hinting that the US tariffs have accelerated the pace of other negotiations, the official said India is actively pursuing new markets and as many as seven Free Trade Agreement (FTA) negotiations are currently under way and that the India-UK deal negotiations are going “very well”. “FTAs take time. We have to be patient, unlike several other countries who have reacted immediately,” the official said in response to a question on India’s stance regarding US tariffs and the status of trade talks. The official said the trade deficit had played a role in the US seeking US reciprocal tariffs, but emphasised that India is not being targeted as a currency manipulator. “India is not a currency manipulator,” the official said. India recorded a trade surplus of $36.8 billion with the US in FY24. While Indian exports to the US stood at $77.5 billion, American exports to India amounted to $40.7 billion. Bilateral trade between India and the US totalled nearly $120 billion in FY24. WTO pushes for more partnership WTO Director-General Ngozi Okonjo-Iweala on Friday encouraged members to use WTO forums to engage constructively, seek cooperative solutions, prevent trade conflicts from escalating, and support an open and predictable trading environment. Initial WTO estimates suggest that US tariff measures introduced on April 2, along with others imposed since the beginning of the year, could lead to an overall contraction of around 1 per cent in global merchandise trade volumes this year. This represents a “downward revision of nearly four percentage points” from previous projections, Director-General Okonjo-Iweala said.
