Therefore,
Customs duties: what challenges showdown:
The fifth world economic power could enter an area of economic turbulence after Donald Trump’s decision to impose. Meanwhile, from Friday, customs duties of 25% on Indian products arriving in the United States.
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The American president also announced on Wednesday that these new taxes would be accompanied by a “penalty”. Consequently, which will also come into force on August 1, intended to sanction New Delhi for the purchase of oil and Russian military equipment.
A few hours later. Therefore, the White House tenant left the door open to other discussions with India, launching journalists customs duties: what challenges showdown “We will see what’s going on!” »»
Here is an overview of the economic issues of these announcements for the two countries.
What consequences for India? – Customs duties: what challenges showdown
The United States is the most populous business partner on the planet which is not an exporting power.
In 2024, New Delhi exported 87.4 billion dollars (76.3 billion euros) of products on American soil.
The country being very protectionist, it recorded last year, a trade surplus of almost $ 46 billion with the United States.
According to analysts. Similarly, such an increase in customs duties could lead to a decrease of 20 to 50 basic points of the Indian gross domestic product.
Bloomberg Economics estimated that a 26% tax for “Made in India” products would drop by approximately 30% of exports. Therefore, to the United States.
The consequences also depend on the amount of the “penalty” imposed by Washington.
More broadly, experts say, Donald customs duties: what challenges showdown Trump’s announcements are a real challenge for the Indian manufacturing sector.
“An amount of 25 %… would compromise the attraction of India as an alternative manufacturing center to China. ” said Shilan Shah of Capital Economics, as well as compared to other Asian countries because it would become less competitive.
What sectors will be the most affected? – Customs duties: what challenges showdown
The main Indian exports such as smartphones, jewelry, textiles, industrial machines, drugs and seafood are threatened.
The market for precious stones. jewelry alone represented, last year, more than $ 10 billion in exports and customs duties could result in “thousands” of job losses.
In addition, this could lead to an “increase in costs, delays in expeditions (…). would put enormous pressure on the whole chain, from small craftsmen to big industrialists”, worried Kirit Bhansali, president of the Indian council for the promotion of exports of precious stones and jewelry.
According to Nomura customs duties: what challenges showdown analysts. the seafood sector – which notably provides shrimp and prawns for American supermarket channels like Walmart – “could lose part of its competitive advantage for the benefit of other suppliers”.
Smartphones and pharmaceutical products are currently exempt from Trump’s “reciprocal” rights.
What blocks a commercial agreement?
The main stumbling block with the American administration is India’s reluctance to fully open its agricultural. dairy sectors by applying high customs duties.
According to officials. New Delhi would not want to thwart farmers – a powerful electorate – by removing customs taxes on basic products such as rice and wheat.
India has also so far refused to authorize the importation of genetically modified products.
While the window to conclude a provisional trade agreement closes. the two parties remain committed to negotiating the first part of a broader trade agreement by October.
What is the nature of its relations with Russia?
Donald Trump’s customs duties: what challenges showdown anger about India purchases of Russian military. oil equipment seems to ignore the fact that New Delhi and Moscow have maintained close historical ties since the Cold War, analysts underline.
According to data from the International Peace Research Institute in Stockholm, Russia provided 76% of Military imports from India between 2009 and 2013.
If this percentage has decreased considerably in recent years, India still depends on Russia for spare parts.
Moscow is also an important supplier of advanced weapons, particularly in terms of underwater technology and cruise missiles.
India has become an important Russian oil buyer. offering an essential export market for Moscow after being lost its traditional buyers in Europe due to the war in Ukraine.
New Delhi saves billions of dollars while bailing out the Moscow funds.
Although India can turn to other gross sources. it will probably be more difficult to completely free itself from Russian military customs duties: what challenges showdown equipment.
“Russia reasoning is surprising since Trump has adopted a less conflicting position towards Moscow than President Biden did. ” Michael Kugelman, analyst of South Asia told AFP.
“New Delhi is the last victim of Trump’s notorious unpredictability.”
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