Trump Tariffs On India Will Have 'Very Little Impact' On Markets, Economy: Ajay Bagga
US President Donald Trump not only announced tariffs as high as 25% on India, but he also added a "penalty" against the country.
US President Donald Trump's 25% tariff announcement on India will have "very little impact" on markets and the Indian economy, according to market expert Ajay Bagga.
The markets will discount the news "very fast," he said.
He further elaborated on the additional penalty that is to be imposed on India regarding its purchase of Russian oil, saying that this would lead to rise of prices in oil and an increase in US inflation as the oil companies in the US would raise their prices.
"If you put a penalty on 9 million barrels on Russian oil, it comes back as oil prices rise," Bagga said.
US President Donald Trump on Wednesday not only announced tariffs as high as 25% on India, but he also added a "penalty" against the country.
Bagga further noted that this pattern of behaviour from Trump regarding tariff policy was not unique to India.
And that he had made similar declarations of a 25% unilateral tariff for countries such as Japan and organisations like the European Union, along with nations that the US had free trade agreements with such as Australia and Japan.
"This is on expected lines, we should not be humiliated by this, it's okay," he said.
He described the tariff announcement as a "letdown", stating that after the announcement was made that the US team would arrive in the middle of August for negotiations, that he was expecting Trump to sign a Bilateral Trade Agreement with India in September.
"What we were conjecturing was that they will let the tariffs run, and in September Trump might be coming to India for the QUAD meeting and sign the BTA himself." Bagga said.
He called the move a "negotiation tactic, showed a maximalist position." "We will see whether it comes that or not," he said.
Bagga estimated the impact of the tariffs on India's trade quantity to be $83 billion. "We are struggling to find exporters, a lot of the time the exporters are small-time medium and small enterprises," he said.
He also noted the reciprocal tariffs on steel, aluminum and medical imports announced by Trump in the past as pain points for India.
He said that the tariffs will have to be "negotiated down to 15% like the EU has done".
