The Government of India is considering reducing tax (tariff) on some expensive products imported from the US. These may include steel, luxury motorcycles and electronic goods. According to the report of NDTV Profit quoting sources, the announcement may be made in the budget speech of Finance Minister Nirmala Sitharaman on Saturday.
India currently imposes more than 100% tariff on 20 products imported from the US. However, this deduction is expected to have no major impact on Indian industries.
Why can India reduce tariffs?
The timing of this decision is also important, as US President Donald Trump recently accused India, China and Brazil of imposing more tariffs. Trump said during a conversation with American leaders, “We will no longer let this happen… we will give priority to America.” He said that these countries impose more tariffs on American goods, causing damage to American trade.
Trump’s ‘US First’ policy
Trump has expressed displeasure over business balance many times before. Their strategy is to promote manufacturing in the US by increasing the tariff on goods coming from other countries. He had also increased tariffs on countries like China to benefit American companies.
Trump has made it clear on several occasions earlier that if a country imposes more tariffs on American goods, then America will also give the same answer. Recently, he did the same with Colombia when 25% tariff was imposed on the goods coming from there as Colombia refused to withdraw some migrants.
If India reduces tariffs on American products, it can promote trade between the two countries. Now everyone’s eyes are on the upcoming budget, where it can be officially announced.