Winning Bizness Desk

Mumbai. India’s exports worth nearly Rs 85,000 crore have been hit hard due to American tariffs. The United States had imposed a 25 percent penalty tariff along with a 25 percent retaliatory tariff. Chief Economic Advisor V Anantha Nageswaran has now said that both could be reduced or lifted after November 30.

CEA hopeful of tariff relief soon

Speaking at a programme in Kolkata, Nageswaran said he believes that by the end of November these tariffs will no longer remain. He clarified that his comments were not based on confirmed information or evidence but on recent developments that indicate progress. He expressed hope that a solution to the tariff and counter-tariff dispute could be reached in the next two months.

Retaliatory tax may drop to 10-15 percent

The CEA indicated that the 25 percent retaliatory tax may come down to 10 to 15 percent. He said the entire tariff problem might get resolved within eight to ten weeks. His remarks come at a time when relations between India and the United States appear to be returning to normal after a difficult phase.

Trade talks between India and US begin again

On Tuesday, India’s chief trade negotiator and special secretary in the commerce ministry Rajesh Agrawal met the US trade representative Brendan Lynch. For the first time since the Trump administration imposed 50 percent tariffs, an American delegation visited India on September 16 to begin fresh trade talks.

Trump’s actions and remarks on tariffs

The United States had earlier imposed a 25 percent penalty tariff on India for buying oil from Russia and an additional 25 percent retaliatory tariff. This strained bilateral relations. However, some recent remarks from President Donald Trump have softened the atmosphere. On September 10, Trump said he was confident that Washington and Delhi would soon reach a better outcome. He added he would speak to Prime Minister Narendra Modi in the coming weeks to remove trade barriers.

Modi’s response and partnership message

Within hours of Trump’s comments, Prime Minister Modi wrote on social media that India and the United States are natural partners and good friends. Modi said he was confident the trade talks would unlock immense potential in the partnership. He said both governments were working hard to conclude negotiations quickly and that he was looking forward to speaking with President Trump to ensure a prosperous future for people of both countries.

Tariff impact on India’s economy

Earlier, Trump had also remarked that America seemed to have lost India and Russia to China’s camp, after seeing Modi with Putin and Xi Jinping at the SCO summit. Meanwhile, CEA Nageswaran recently told Bloomberg TV that if the additional tariffs remain only for this financial year, they could impact India’s GDP by 0.5 to 0.6 percent. But if extended into the next year, the impact would be far more severe, posing a bigger risk for India’s economy.

Story in a nutshell

• US may lift 25 percent penalty tariff on India after November 30
• CEA Nageswaran hopeful tariff and counter-tariff dispute ends in two months
• Retaliatory tax could drop from 25 percent to 10-15 percent
• India’s exports worth Rs 85,000 crore badly hit by tariffs
• India and US trade negotiators resume talks after long gap
• Trump expresses confidence in better trade outcomes with PM Modi
• Prolonged tariffs could slash India’s GDP by up to 0.6 percent