After US President Donald Trump put on hold his decision to impose tariffs on more than 75 countries, India breathed a sigh of relief. After all, the US duties have called into question Indian shrimp exports to America. Trump’s moves have further threatened exports of Indian manufactured goods and handicrafts. Electronics worth $14 billion and precious stone products worth $9 billion were hit.
The pause will last 90 days. And Delhi will try to come to an amicable agreement with Washington, especially considering that India’s main competitor in Asian markets, China, has not received any relief. On the contrary, duties of 125% have been imposed against it.
Ajay Sahai, CEO of the Federation of Indian Exporters, which includes 37,000 companies, says the 90-day pause gives Indian negotiators the opportunity to work out a bilateral deal with the United States. Sahai justifies his forecast as follows: “The United States has probably decided to hit China hard. At the same time, they want to ensure that the supply of consumer goods to America is not affected. The United States also intends to keep inflation under control. In this case, India becomes the most reliable supplier.”
According to Reuters, an Indian official, who requested anonymity, said that India would be one of the first countries to conclude a deal with the United States, and the parties even discussed the deadline when it should be concluded. At the same time, Delhi emphasizes that India and the United States have a common position on China. Both powers have been suffering from “unfair trade practices” that have been operating in China for many years. This maxim was expressed by the Indian Minister of Commerce a few days earlier. The conclusion of a separate deal with the United States will give India an advantage over its competitors, the Delhi press writes.
But what is the deadline for concluding an Indian-American deal? At the moment, Indian officials are not commenting on this issue. But earlier, officials at the Ministry of Commerce said that the deal would be concluded before the end of this year. And by 2030, the volume of bilateral Indian-American trade is expected to reach 500 billion dollars.
However, The New York Times paints a less idyllic picture. Millions of new Indian investors are trembling after the tariff shake-up. They were lured by the boom in the market and the easy access to it online. Now these people are in shock. Indeed, Indian stocks lost $170 billion on the Bombay Stock Exchange in Mumbai last Monday.
And what happened? According to an American newspaper, millions of small investors have entered the Indian stock market in recent years. They expected to get rich and relied on the rapid economic growth of the country. Young people and retired people were seduced by catchy advertising and the ability to easily open online accounts.
And this week, these people had to go through difficult moments. Indian markets have fallen, weighed down by fears that Trump’s new tariff regime will trigger a global recession. In other words, Indian markets reacted to Trump’s tariffs in much the same way as the markets of many other countries. And on Tuesday, Indian markets rebounded, buoyed by hopes for a deal with the United States. But on Wednesday, the Sensex and Nifty 50 indexes fell again. The central bank of India has cut interest rates and lowered its forecast for economic growth, citing market volatility. Sanjay Malhotra, governor of the Reserve Bank of India, said recent tariff measures have increased uncertainty and clouded economic growth prospects in different parts of the world.
