The 90-day deferral of reciprocal tariffs by the United States has been welcomed as a significant relief by Indian exporters, who view the temporary pause as a strategic window to push forward on the long-awaited India-US bilateral trade agreement (BTA). The move is expected to help both sides avoid immediate economic disruption and create room for diplomatic engagement.
Exporters Reassured, See Opportunity for Trade Pact Finalisation
Federation of Indian Export Organisations (FIEO) President S C Ralhan expressed optimism following the US decision. “It is a good decision by the Trump administration. We have been assured by the commerce ministry that the agreement will be finalised at the earliest,” he said. According to Ralhan, the pause is a calculated move to avoid economic fallout while enabling talks to resume in earnest.
He added, “A huge relief to our exporters. The 90-day deferral of the reciprocal tariff provides a critical window for diplomatic engagement and trade negotiations.”
Industry Hopes for Long-Term Normalisation
Mumbai-based exporter S K Saraf echoed similar sentiments, pointing out that Indian businesses can now reposition themselves in the global value chain by leveraging the high tariffs imposed by the US on Chinese goods.
“For example in textiles, we can import different types of yarns from China and produce garments for exports. It’s a good opportunity for the elephant and dragon to come together,” he said, expressing hope that the pause would be extended further and that normalcy in trade relations would be restored.
Context: Tariff Chaos and Ongoing Talks
US President Donald Trump, amid ongoing global economic uncertainty, announced a sweeping hike in tariff rates on Chinese goods, raising duties to as high as 125%. However, he simultaneously granted a 90-day reprieve to most other nations, including India, postponing the imposition of reciprocal tariffs.
Despite this temporary relief, the US has implemented a 10% import tariff, effective April 5, while an additional 26% import duty remains in place on Indian goods.
Also read: India Tightens Steel Import Rules
India Working Toward a Balanced Deal
In a meeting with industry leaders and exporters on April 9, Commerce and Industry Minister Piyush Goyal urged calm, assuring that the government is pursuing the “right mix and right balance” in its approach to the proposed trade agreement with the US.
“The Indian team is working with speed but not in undue haste,” Goyal said, emphasizing the importance of securing a comprehensive deal that serves India’s long-term interests.
Bilateral Trade Agreement in Focus
India and the US are aiming to more than double their bilateral trade from the current level of around $191 billion to $500 billion by 2027. Negotiations are currently underway, with hopes to conclude the first phase of the BTA by the fall of this year, between September and October.
As both governments work through sensitive trade issues, the 90-day pause is seen as a crucial opportunity to resolve outstanding matters and move toward a more stable and mutually beneficial trade relationship.
