India will watch out for possible import tariff increases and hardening of stance on work visas once US President-elect Donald Trump assumes office in January as any such move will need to be tackled with tact and balance, say sources.

“There is a high possibility that import tariffs could be raised, at least on certain items, by the Trump 2.0 regime as it has been an important plank in the election campaign. India will certainly watch out for it and try to take balanced and tactful action if that happens,” a source tracking the matter told businessline.

During his first stint as the US President, between January 2017 and January 2021, Trump had imposed penal duties on Indian steel and aluminium, following which India imposed retaliatory tariffs on a number of prominent US exports to India such as apples, almonds, chickpeas, lentils and walnuts.

“India managed to hold successful negotiations with the US government and finally the Biden regime agreed to exempt a substantial part of steel and aluminium exports from India from penal tariffs. In return India removed most of its retaliatory tariffs. This is an example of India’s capability of fending for itself,” the source said.

US was India’s largest trading partner in 2023-24 with bilateral trade valued at $119.7 billion and Indian exports at $77.15 billion.

Indian exports threatened

In his election campaign, Trump threatened to impose 10 per cent tariffs on all goods imported into the country and up to 60 per cent on China, arguing that it would help re-build the US manufacturing base, generate employment and increase federal revenues.

In a speech in Detroit last moth, Trump alleged that India imposed the highest tariffs on foreign products among all major countries. He threatened to impose retaliatory tariffs if elected to power.

“Trump may pressure India to cut tariffs and also impose higher tariffs on Indian goods, especially in sectors like automobiles, textiles, pharmaceuticals, and wines, which could make Indian exports less competitive in the US market, impacting revenue,” said Ajay Srivastava, Founder, Global Trade and Research Initiative (GTRI).

There is also a possibility that as the US intensifies its stance on China, new opportunities may open for Indian exporters to fill gaps left by restricted Chinese imports, he added.

There could be a hardening of stance on work visas as well, feel some experts. “In his pre-election speeches, Trump has been aggressively anti immigrants. With his victory he will see it as Americans voting against migration. We have to wait and watch what happens to L-1 and H-1B visas (non immigrant visas that allow foreign workers in the US),” said Biswajit Dhar, Distinguished Professor, Council for Social Development.

Related Topics