India - US Tariff and Relations | News + Updates

@r3alist bro

And it's not as if you did not stop Iranian oil purchase so as not to offend other nations.

There were sanctions on Iranian oil, not on Russian oil as far as I know.

Regards
 
Vikramaditya1 said:
What you mean short term? It's been months lol! The reality is that India is not a major electronics and merchandise exporter like China so Indian goods landing in America are mostly services that are in essence a software as a service. The exposure although significant was reduced and Indian exporters rerouted those goods elsewhere. So our merchandise exports to Africa, Europe, ME, LatAm and other Asians increased while the US decreased.

Indian currency is fine as long as our domestic inflation don't go up which it didn't. Our inflation is one of the lowest, growth rate the highest, which is the exact Sweet spot one wants to be.
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GDP growth is measured only quarter-wise, so a couple of quarters is certainly short-term in national income accounting terms, especially when the full impact of the tariffs has not been felt. India may not be a major electronics manufacturer, but there are several labour intensive export focussed sectors like textiles and polished diamonds that are affected. Some of the exports are being transhipped, as they are for all countries facing high tariffs, which attracts additional punitive tariffs that the Trump administration is not currently policing.

Certainly, the Indian economy is not as dependent on trade in goods as Vietnam, for instance, so even the medium and longer term impact of US tariffs will be limited, but it will not be inconsequential. It also depends on the reference point one is looking at. When the Trump administration initially put forward the tariff proposals, India was seen as having a great set of cards and in front of the queue. The consensus opinion was that it would be one of the biggest winners of Trump's trade policies at the expense of China. If you look at that hypothetical as the reference point, the impact on the Indian goods trade will be quite substantial , if the current tariffs stay in place. Of course, the trade sector being relatively small, the overall impact will be limited, but India was seen to have the opportunity to have a China moment where a favourable deal with the US could have finally made India an manufacturing and exporting powerhouse and put in on track for ~ 10% GDP growth for multiple years, but that has not fructified and seems unlikely to.
 
Owaiz said:
GDP growth is measured only quarter-wise, so a couple of quarters is certainly short-term in national income accounting terms, especially when the full impact of the tariffs has not been felt. India may not be a major electronics manufacturer, but there are several labour intensive export focussed sectors like textiles and polished diamonds that are affected. Some of the exports are being transhipped, as they are for all countries facing high tariffs, which attracts additional punitive tariffs that the Trump administration is not currently policing.

Certainly, the Indian economy is not as dependent on trade in goods as Vietnam, for instance, so even the medium and longer term impact of US tariffs will be limited, but it will not be inconsequential. It also depends on the reference point one is looking at. When the Trump administration initially put forward the tariff proposals, India was seen as having a great set of cards and in front of the queue. The consensus opinion was that it would be one of the biggest winners of Trump's trade policies at the expense of China. If you look at that hypothetical as the reference point, the impact on the Indian goods trade will be quite substantial , if the current tariffs stay in place. Of course, the trade sector being relatively small, the overall impact will be limited, but India was seen to have the opportunity to have a China moment where a favourable deal with the US could have finally made India an manufacturing and exporting powerhouse and put in on track for ~ 10% GDP growth for multiple years, but that has not fructified and seems unlikely to.
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You're self contradicting. How quarterly growth won't be instantaneously affected by tariffs. Tariffs take effect today it'll be felt across the quarter which the tariff remains and yet the growth was higher than expected. India export of Diamonds got rerouted to UAE and UK. But by the looks of it, US tariff had limited impact as the tariffs forced countries to find ways to increase trade relationship with the rest of the world effectively undercutting the US.

Your argument is what could've been without US tariffs. If there was no US tariff the growth would've been 10% but there will not be a concession to sign trade deals quicker, reduce domestic taxes to boost consumption without a threat of tariffs this would've subdued the demand as there was always a US to absorb the exports and government easily make money from taxes. What prompted a change was a prospect of economic hardship due to tariffs. In that aspect tariffs are a blessing in disguise. Increased consumption also increased revenue which can compensate for the revenue loss due to tax reduction.
 
Vikramaditya1 said:
You're self contradicting. How quarterly growth won't be instantaneously affected by tariffs. Tariffs take effect today it'll be felt across the quarter which the tariff remains and yet the growth was higher than expected. India export of Diamonds got rerouted to UAE and UK. But by the looks of it, US tariff had limited impact as the tariffs forced countries to find ways to increase trade relationship with the rest of the world effectively undercutting the US.

Your argument is what could've been without US tariffs. If there was no US tariff the growth would've been 10% but there will not be a concession to sign trade deals quicker, reduce domestic taxes to boost consumption without a threat of tariffs this would've subdued the demand as there was always a US to absorb the exports and government easily make money from taxes. What prompted a change was a prospect of economic hardship due to tariffs. In that aspect tariffs are a blessing in disguise. Increased consumption also increased revenue which can compensate for the revenue loss due to tax reduction.
Click to expand...
The effects of trade policies manifest themselves only with long and variable lags, so it is just plain stupid to pass judgement on their impact in just a few months. That is true not just for India but all over the world. For instance, the US itself has seen unexpectedly high growth due to short-term factors that will abate over time.

Tax cuts are generally a one-off tool that are used counter-cycylically. Their impact is most pronounced in the short-term as it unleashes botttled-up demand, but then diminishes over time. Somebody who was undecided on buying a car and pulled the trigger because the price came down due to price cuts is not going to buy another car in 3 months even if the tax rates are cut again. In any case, tax rate cuts reduce the Tax/GDP ratio, and India only has limited fiscal space to provide fiscal stimulus without compromising its sovereign creditworthiness and risking a credit rating downgrade. There is good reason why the consensus among professional economists is that the growth rate of India's GDP will slow down by about a percentage point in the following year. It may not be a disaster but it is absolutely incorrect to claim that US tariffs are inconsequential and not adversely impacting India's economy. Some industries and geographies are significantly affected, even if strength in other parts of the economy is maintaining the macro-level statistics.

The United States is India's biggest export market, by far, for both goods and services. It is impossible to completely compensate for the loss of significant or complete access to this market.
 
Trump voters are mainly farmers , and Trump wants to provide a new market alternative to china , As china once stopped importing American soyabeans.
If trump's party want to stay in power they need farmers support.
Trump wants india to open its agriculture sector, but our government is not gonna do such thing.Even indian congress did not opened agriculture sector in thier ruling even if pressure was high.
History have taught us a lesson ,we are not gonna do same mistake again.
 
Sri said:
Trump voters are mainly farmers , and Trump wants to provide a new market alternative to china , As china once stopped importing American soyabeans.
If trump's party want to stay in power they need farmers support.
Trump wants india to open its agriculture sector, but our government is not gonna do such thing.Even indian congress did not opened agriculture sector in thier ruling even if pressure was high.
History have taught us a lesson ,we are not gonna do same mistake again.
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Why is this indian douche bag being allowed to spoil every thread on this forum?? 23 messages and he already showing his true cheap indian colours.
:LOL:
@RescueRanger
 
ARMalik said:
Why is this indian douche bag being allowed to spoil every thread on this forum?? 23 messages and he already showing his true cheap indian colours.
:LOL:
@RescueRanger
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How exactly it is effecting your sentiment, i don't understand. It is us india tariff thread and i am posting about economy 😕
 
Owaiz said:
The effects of trade policies manifest themselves only with long and variable lags, so it is just plain stupid to pass judgement on their impact in just a few months. That is true not just for India but all over the world. For instance, the US itself has seen unexpectedly high growth due to short-term factors that will abate over time.
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What should be the average time then? It's been over 6 months. Two quarters have passed, Indian exports to US largely remained stable. I'm not saying tariffs have no effect but their effects are overblown when it comes to India.
Owaiz said:
Tax cuts are generally a one-off tool that are used counter-cycylically. Their impact is most pronounced in the short-term as it unleashes botttled-up demand, but then diminishes over time
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The consumption growth won't diminish over time. It's going to keep growing albeit at a higher pace.
Owaiz said:
In any case, tax rate cuts reduce the Tax/GDP ratio, and India only has limited fiscal space to provide fiscal stimulus without compromising its sovereign creditworthiness and risking a credit rating downgrade.
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Yeah I call bullshit on that. In both cases the consumption growth was higher enough to cover for the lost in revenue. October, November and December receipts grew at 4, 1, and 6% respectively. That's a whole quarter with 3% growth despite big slash in GST. India already had a rating upgrade for S&P and others affirming the BBB- with a stable Outlook for 2026. Not really the downgrade you would expect. I could quote what these agencies themselves mentioned about these cuts which is positive and rather they updated GDP growth up by 7.4% in 2026, you get the gist. Which questions about the "ekonomist" you mentioned here.
Owaiz said:
There is good reason why the consensus among professional economists is that the growth rate of India's GDP will slow down by about a percentage point in the following year.
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Who?!
Owaiz said:
The United States is India's biggest export market, by far, for both goods and services. It is impossible to completely compensate for the loss of significant or complete access to this market.
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Yes all that's true, and India might arrive at a trade deal with the US as well. But before that we might sign major trade deal (FTA) with EU which will dwarf any trade deal we sign with the US.
 
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@r3alist


So Britain is buying sanctioned Russian oil, mind you not unsanctioned Russian oil. No punitive tariffs!

tvpworld.com

Germany asks US to exclude three refineries from Russia sanctions

The three refineries in Germany are Russian-owned but German-run.
tvpworld.com tvpworld.com

Germany is asking for (and I think it has got) exemptions from sanctions on Russian oil. No punitive tariffs!

And yet it is IND which is the beneficiary of "strategic altruism"!

Regards
 
Owaiz said:
The effects of trade policies manifest themselves only with long and variable lags, so it is just plain stupid to pass judgement on their impact in just a few months. That is true not just for India but all over the world. For instance, the US itself has seen unexpectedly high growth due to short-term factors that will abate over time.

Tax cuts are generally a one-off tool that are used counter-cycylically. Their impact is most pronounced in the short-term as it unleashes botttled-up demand, but then diminishes over time. Somebody who was undecided on buying a car and pulled the trigger because the price came down due to price cuts is not going to buy another car in 3 months even if the tax rates are cut again. In any case, tax rate cuts reduce the Tax/GDP ratio, and India only has limited fiscal space to provide fiscal stimulus without compromising its sovereign creditworthiness and risking a credit rating downgrade. There is good reason why the consensus among professional economists is that the growth rate of India's GDP will slow down by about a percentage point in the following year. It may not be a disaster but it is absolutely incorrect to claim that US tariffs are inconsequential and not adversely impacting India's economy. Some industries and geographies are significantly affected, even if strength in other parts of the economy is maintaining the macro-level statistics.

The United States is India's biggest export market, by far, for both goods and services. It is impossible to completely compensate for the loss of significant or complete access to this market.
Click to expand...


All that is true and we are also not great exporters. But you are wrong about future. India has signed many FTAs last year to boost trade and mother of all will be signed this year. So impact of US will be limited. If we lose .5% of GDP growth (at best), that is small price for not putting up with trash. All economists pretend that everything would remain the same in future. But it won't. 2026 will known as year of reforms. Fixing structural issues like regulations, judiciary, labor etc.. will serve us better in long term. Adversity brings necessary change. We eagerly wait coming budget.
 
Vikramaditya1 said:
What should be the average time then? It's been over 6 months. Two quarters have passed, Indian exports to US largely remained stable. I'm not saying tariffs have no effect but their effects are overblown when it comes to India.

The consumption growth won't diminish over time. It's going to keep growing albeit at a higher pace.

Yeah I call bullshit on that. In both cases the consumption growth was higher enough to cover for the lost in revenue. October, November and December receipts grew at 4, 1, and 6% respectively. That's a whole quarter with 3% growth despite big slash in GST. India already had a rating upgrade for S&P and others affirming the BBB- with a stable Outlook for 2026. Not really the downgrade you would expect. I could quote what these agencies themselves mentioned about these cuts which is positive and rather they updated GDP growth up by 7.4% in 2026, you get the gist. Which questions about the "ekonomist" you mentioned here.

Who?!

Yes all that's true, and India might arrive at a trade deal with the US as well. But before that we might sign major trade deal (FTA) with EU which will dwarf any trade deal we sign with the US.
Click to expand...
You are again conflating stable overall macro indicators with deep sectoral impacts to make illogical arguments. A large proportion of Indian exports to the US like iphones and pharma are still exempt from tariffs and are the main drivers of the growth that has offset the significant impact on the impacted sectors like textiles. It is plain common sense. The profit margins on textiles are low single digit percentage points. In the short-term, he may have struck inventory or just be hoping for abatement in tariffs, but it is simply impossible for an Indian exporter to compete with such a huge tariff disadvantage against Bangladesh. The Indian government itself realises it, which is why they are aggressively pursuing FTAs with other economies. It cannot simultaneously be true that a zero tariff agreement with Europe will be consequential and significantly higher tariffs than competitors with the US will be inconsequential. The behaviour of the financial markets reflects this, and so does the fact that most private sector and IMF/World Bank type forecasters have India GDP growing at a 6%+ handle in calendar year 2026 compared to the 7% and 8% handles in recent quarters.

January marks the start of the financial year for most American retailers and they will soon start placing large orders for the next holiday shopping season. I would say the next few months are crucial for the Indian exporters who have been hanging on.

In any case, you do seem to have finally acknowledged that the impact of US tariffs is not inconsequential, which was what I had reacted to, so, at least from my perspective, there seems to be no point arguing on this any further.
 
Thinking said:
All that is true and we are also not great exporters. But you are wrong about future. India has signed many FTAs last year to boost trade and mother of all will be signed this year. So impact of US will be limited. If we lose .5% of GDP growth (at best), that is small price for not putting up with trash. All economists pretend that everything would remain the same in future. But it won't. 2026 will known as year of reforms. Fixing structural issues like regulations, judiciary, labor etc.. will serve us better in long term. Adversity brings necessary change. We eagerly wait coming budget.
Click to expand...
I already said India is not a big trading nation, so the impact on overall GDP would be limited. It could be 0.5% as you said if tariffs are not increased further or higher if electronics and pharma, which are currently exempt from tariffs but under investigation by the Trump administration, are also targeted.

FTAs with other countries will help, but the US is by far the biggest market in the world . Plus, all other countries are also scrambling to do FTAs with other major economies like the EU to de-risk their US exposure. Chinese companies are already dumping goods meant for the US in the European Union and other advanced economies . So, replacing the biggest market in the world is not easy, which is why all major economies have held their noses and reached or are trying to reach some sort of accomodation with Trump and India also likely will.

Of course, it is India's prerogative to decide whether to put up with the trash, as you put it, but, with large amount of capital and the livelihood of millions involved, the Indian government , in my opinion, will ultimately try to conclude some sort of a deal that is tolerable to it.
 
@Owaiz sb

but, with large amount of capital and the livelihood of millions involved, the Indian government , in my opinion, will ultimately try to conclude some sort of a deal that is tolerable to it.

That sums things up quite well.

Regards
 
SoulSpokesman said:
@r3alist


So Britain is buying sanctioned Russian oil, mind you not unsanctioned Russian oil. No punitive tariffs!

tvpworld.com

Germany asks US to exclude three refineries from Russia sanctions

The three refineries in Germany are Russian-owned but German-run.
tvpworld.com tvpworld.com

Germany is asking for (and I think it has got) exemptions from sanctions on Russian oil. No punitive tariffs!

And yet it is IND which is the beneficiary of "strategic altruism"!

Regards
Click to expand...
Well the strategic altruism refers more to everything since the nuclear deal, the Russian oil episode is the very tail end
 
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