A world war in trade and prices seems to be in sight, but for the moment, India keeps its cards near its chest. The officials have stressed that India has already reduced import rights to several elements in the context of the rationalization of the Union 2025-26 budget and awaits the impact of this. According to sources, India can be willing to reduce prices on more imports from the United States, but for the moment, hopes are pinned at the meeting of Prime Minister Narendra Modi with President Donald Trump during his two -day visit to Washington from February 12, 2025.
Trump has announced that the United States would increase aluminum and 25% steel import duties, compared to 10% with effect compared to March 4, which could have a direct impact on countries like India.
This is a rehearsal of the prices he imposed in March 2018 during his first mandate as American president. The prices withdrawn on imports of steel and aluminum from India on July 3, 2023 as part of a wider commercial resolution announced during the visit of Prime Minister Narendra Modi in Washington.
A Global Trade Research Initiative report pointed out that the return of steel and aluminum prices could be used as a leverage in commercial negotiations. “The 2018 prices were largely considered as an aggressive strategy to force business partners in concessions. The last decision, if implemented, could lead to new disputes and reprisal measures from affected countries, “said the report.
However, a Nomura report noted that emerging Asian economies, including India, Thailand and China, have higher rate of American exports and are therefore at risk of higher reciprocal rates. According to the report, India has an average weighted effective rate of 9.5% on American exports to India compared to a rate rate of 3% on India exports to the United States.
“We expect Asian savings to intensify their negotiations with Trump. India plans to reduce prices to more than 30 articles, including luxury vehicles, solar cells and chemicals and preparation for increasing American defense and energy purchases, “said the report.
The United States represents almost 18% of the total exports of India (about 2.2% of GDP, from the 2010 financial year) and is the largest export destination in India, the surplus Indian-American commercial in recent years to reach a summit of around $ 38 billion in about US 2024. Key exports include electric / industrial machines, gems and jewelry, pharmaceuticals, fuels, iron And steel, textiles, vehicles, clothing and chemicals, among others, including iron and steel and aluminum represent almost 5.5% of the total, says the report.
However, in a post-budget interview with BT, the finance and income secretary, Tuhin Kanta Pandey, noted that India’s prices on American imports were not very high. “Of the 13 major products in the United States, you would see important products imported from the United States on industrial goods, our prices are less than 10%,” he said, adding that with the financial year Budget, it has been reduced more.
The effective rate of India is now down to 10.6%, which is close to the level of the Anase, he noted. It was initially 13%, then reduced to 11.6% in the last budget.
The Union 2025-26 budget abolished seven pricing rates for customs duties, leaving only eight rates now, including the zero rate, and has rationalized the rates on several elements.
