The Indian government is readying a plan to tackle the United States' tariff policies and various scenarios are being drawn up on potential impacts, according to sources.
The Centre has asked key stakeholders within India Inc. for inputs on the possible negative and positive impacts of US President Donald Trump's tariff announcements.
A blueprint could be prepared ahead of Prime Minister Narendra Modi's upcoming visit to the US, and India is trying its best to leverage its existing relations with Washington.
For context, the US is India's largest trading partner, with $119.7 billion worth bilateral trade in goods. This comprises $77.5 billion in exports and $42.2 billion of imports. India is in trade surplus of about $35.3 billion with the US.
Further, the 10% tariff arbitrage against China could boost India's competitiveness, while the 25% tariffs on Canada and Mexico, which have been put on hold for 30 days, is beneficial for India, according to sources.
At the moment, the government is seeing no direct threats against India, while it studies the existing scenario.
Since his oath, Trump has sounded alarm bells across geographies, with moves like tariff threats to BRICS nations, and pulling out of the global tax deal as well as the Paris Agreement.
While the Indian government has been largely optimistic, there's an element of caution as well. External Affairs Minister S Jaishankar called Trump 2.0 "an extraordinarily active administration", while noting that India's relationship with the US will go to a higher level.
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