India and US Trade Relations Take a Positive Turn

Following US President Donald Trump's surprising decision to pause the implementation of reciprocal tariffs, India is now more eager than ever to fast-track a trade agreement with the United States. This move comes as part of a broader strategy to achieve a bilateral trade target of $500 billion by 2030.

Key Developments: Trump announced an increase to 125% tariff on Chinese imports while maintaining the US reciprocal tariff for India at 10%. This decision has been seen as a relief for Indian exporters, particularly in the shrimp industry.

Exploring New Opportunities

India has expressed openness to consider duty-free imports from the US across various sectors, including those under the Production Linked Incentive (PLI) schemes. This could significantly expedite the proposed bilateral trade agreement between the two nations.

PLI Scheme Highlights: Currently spanning 14 sectors with an allocated budget of Rs 1.97 lakh crore, the scheme covers mobile phones, drones, white goods, telecom, textiles, automobiles, specialty steel, and pharmaceuticals.

Global Economic Uncertainties

Amidst ongoing global turmoil, the Reserve Bank of India has cut the repo rate by 25 basis points to 6%. RBI governor Sanjay Malhotra has highlighted the heightened risks to India’s GDP growth due to trade war uncertainties, emphasizing the challenges posed by the current economic environment.