India's Strategic Opportunity Amid US Tariff Threats

India has a unique chance to leverage the US's reciprocal tariff threats into a favorable negotiation for mutual tariff reductions, according to Arvind Panagariya, chairman of the 16th finance commission. This approach could not only mitigate potential trade conflicts but also enhance India's access to the US market, making it a win-win scenario for both nations.

Strengthening Economic Ties Through Tariff Negotiations

Panagariya emphasized the importance of using the current economic liberalization to become more competitive and efficient. By engaging in reciprocal tariff negotiations, India stands to gain better market access in the US, which could significantly benefit its export sector.

Potential Risks of a Tariff War

However, Panagariya warned against the dangers of a tariff war, which could harm both economies. Instead, he advocates for a strategic approach that focuses on mutual benefits and long-term economic growth.

With US-India bilateral trade reaching $190.08 billion in 2023, the stakes are high for both countries to find common ground and avoid escalating trade tensions.