With the deadline for the reciprocal tax announced by US President Donald Trump on August 1, just one day away, President Trump has officially announced that a 25% tax will be imposed on Indian goods as the trade deal between the US and India has not yet been finalized.
The spotlight on imposing taxes on countries that have not signed a trade deal with the US has now turned to India. He said that this 25% tax will come into effect from tomorrow (August 1).
There is no doubt that this decision will increase trade problems between the two countries. This 25% tax will increase the prices of pharmaceutical products, diamonds/jewelry, textiles/clothing, machinery, chemicals, vehicles and iron/brass products, which are exported from India to the US in large quantities.
Although this tax is seen as a step taken to correct the US trade deficit, the increase in the prices of these products may turn into inflation for American consumers. This could have a major impact on trade relations between the two countries. It will also become a huge burden for Indian traders.
Apart from that, Trump has also threatened to impose additional taxes on India-Russia relations, i.e., on the purchase of more military equipment and crude oil from Russia. Due to this, Indian exporters will face additional damage. Although India has not yet announced a tax against the 25% tax from the US, central government officials have said that it is ready to face the impact of the US taxes.
During Trump's first term, when taxes were imposed on Indian goods and trade restrictions were imposed, the Indian government took retaliatory measures. Similarly, the central government led by Prime Minister Modi is also preparing to face the 25% tax imposed during Trump's second term. Only time will tell what India's retaliatory measures will be.
The 25% tax is a gift from Trump to India, which has maintained a neutral policy by balancing Russia and the US on both sides of the scale. ``Whoever is, should be under him. Whether it is trade or war...' Is Trump's brilliant policy of adopting a democratic one? & This question is being raised all over the world.
However, at present, negotiations are the main position of the Indian government. US representatives are scheduled to meet Indian officials in Delhi in mid-August. Although there is some hope that important decisions in our country's favor may be reached in this meeting, the 25% tariff imposed by Trump is seen as an act that makes it meaningless to call India an ally of the US!