Tariff War / India is cautious about Trump's 'retaliatory tariff', Plan A, B, C is ready

Tariff War: US President Donald Trump is going to announce his much-awaited tariff policy today, which is being called 'Reciprocal Tariff'. Earlier, he has claimed that India will reduce the tariff on American imports to a great extent. This statement has come at a time when instability is increasing in the global trade world.

There is concern in the international markets about the 'Liberation Day Tariff' to be announced by the Trump administration. It will be announced at 4 pm on Wednesday evening US time (early Thursday in India). Trump says that many countries including India are being forced to reduce their tariffs under the pressure of his policies.

India's strategy: Wait and watch

India has adopted a 'wait and watch' policy regarding this situation. Compared to other big economies, India has adopted a more balanced approach and has decided to do a thorough analysis of the possible effects. The Indian government is working on a three-stage plan (Plan A, B and C) to reduce the impact of Trump's policies.

Plan A: Diplomatic talks and trade agreements

India's primary strategy is to pursue diplomatic talks with the US. The government may discuss new trade agreements with the US to avoid potential losses to Indian exporters.

Plan B: Diversification of exports

If the Trump administration imposes higher tariffs on Indian products, India will look to diversify its export markets. Agreements can be made with new trade partners such as Europe, South Asia and Latin America.

Plan C: Retaliatory tariffs on imports

If the US imposes additional duties on Indian products, India may also consider imposing retaliatory tariffs on US products. This policy can boost domestic industries and provide a competitive edge to Indian companies.

Which sectors will be affected?

• IT services: The US is the largest market for Indian IT companies. If tariffs are increased, it may impact the competitiveness of Indian IT companies.
• Pharma industry: Indian pharmaceutical companies are highly dependent on the US market. The pharma sector may face the problem of rising costs due to additional tariffs.
• Automobile sector: If the US increases tariffs on automobile imports, Indian automakers may face difficulties.
• Textile industry: India's textile industry is a leader in exports to the US. An increase in tariffs may impact this sector.