India Us Tariff / Has the market found a solution to Trump's tariff? India has made a great plan

India Us Tariff: In the next few hours, Indian Prime Minister Narendra Modi will be on a visit to America, and even before that the Indian government has prepared a concrete plan to reduce the impact of 'Trump Tariff'. This move is expected to provide relief to the Indian stock market. The Indian government is planning to reduce import duty on more than 30 American products, which can reduce the threat of tariffs imposed by America.

India labeled as 'tariff king'

Donald Trump and US officials have described India as a 'tariff king' because India imposes higher tariffs on imported products than other countries. Trump has also indicated earlier that if India does not reduce its tariffs, it will face a similar response. In addition, India will also have to increase the purchase of American defense equipment and energy products.

Key points of Nomura report

According to a report by Nomura, India is considering reducing duty on more than 30 products to avoid high US tariffs. India has recently reduced import duty on electronics, textiles and high-end motorcycles. Apart from this, steps have also been taken towards strengthening diplomatic relations with the US, such as agreeing on the return of illegal Indian immigrants. Now, India plans to cut tariffs on luxury vehicles, solar cells and chemicals under its trade policy.

What if India does not reduce tariffs?

If India does not reduce high tariffs on US products, the US may impose similar duties on Indian exported products. For example, if India imposes a 25% tariff on US automobiles, the US may also impose similar duties on Indian vehicles. The Trump administration has always advocated a reciprocal tariff policy.

India-US trade balance

The US is India's largest export destination, accounting for about 18% of India's total exports. In FY 2024, it was 2.2% of India's GDP. India's trade surplus with the US reaches about $38 billion in 2024. Industrial machinery, gems and jewellery, pharmaceuticals, fuel, iron and steel, textiles, vehicles and chemicals are mainly exported from India to the US.

Trump's 'tariff king' comment and India's response

Calling India a 'tariff king', Trump had stressed the need to buy more US security equipment from India. During the discussion with Prime Minister Modi, he stressed on promoting fair bilateral trade relations. India is also making efforts to reach an agreement with the US so that the trade balance is maintained and high tariffs are not imposed.

Indian stock market hopes for relief

While many countries are preparing to respond to America's tariff policy, India has adopted a policy of reducing tariffs and maintaining smooth trade relations. The Indian rupee and stock market can get direct benefit from this.

If the tariff war between India and the US is averted and US investment increases in India, the Indian economy will benefit. Apart from this, the trend of foreign investors can also increase towards the Indian stock market.

Recent Stock Market Fall and Investor Losses

However, the Indian stock market has seen a huge decline in recent times. The Sensex has fallen by more than 2000 points in 5 days, while the Nifty has also fallen by about 700 points. By the time the market closed on Tuesday, the total market cap of the BSE had declined by about Rs 9 lakh crore. Investors have lost a total of Rs 17 lakh crore in the last five days.

Conclusion

This initiative of the government can be important in balancing the trade relations between India and the US. If India successfully implements the plan to reduce tariffs, it will not only reduce the threat of US tariffs but will also provide stability to the Indian stock market and economy. The upcoming meeting of Prime Minister Modi and President Trump will be very important in this context.