New Delhi [India], August 1 : The US administration's 25 per cent blanket tariffs on Indian goods is "unfortunate" but are poised to be short-lived, as both the partner countries are working on a Bilateral Trade Agreement (BTA), Vimal Pruthi, Partner, International Trade, EY India, said on Friday.
"This is an unfortunate move by the Trump administration...It will impact, in short term, on some of the export sectors like textile, gems, and jewellery, engineering goods, FMCG products. It is surely going to impact in the short term," Pruthi told ANI.
He sees the impact of tariffs going away as and when the interim trade deal is reached.
"We all know that Indian government is already in discussion with the US administration for a trade deal, so we can hope that in the coming months or so the trade deal will be concluded and this impact will go away," the EY India executive asserted.
Asked whether he sees this move by the Trump administration as part of a larger protectionist agenda or India being specifically targeted, he said it can be seen from the lens of 'Making America Great Again' plans.
"President Trump's policy is America first. So this is a move towards that. They want to protect their interests. It's their right. They are doing this with all the countries. There is nothing specific with India," he said.
Should India retaliate with counter tariffs or what could be the ideal response from the central government, Pruthi opined that any aggressive steps can derail trade deal negotiations.
"India can levy tariffs, but at this moment when we are already in discussions for a trade deal, any aggressive step can derail the discussions. So, therefore India should keep its cool. The maturity should be shown the momentous pleasure by responding to any remarks should not be taken."
On Wednesday, President Trump announced the imposition of 25 per cent tariffs on Indian goods and an unspecified 'penalty', even as there were hopes of an interim India-US trade deal before August 1 deadline which would have otherwise helped avoid elevated tariffs.
There were some reservations from the Indian side on the US demand for opening up the agricultural and dairy sectors for the US. Agriculture and dairy are critical for India as these two sectors provide livelihood opportunities to a large section of its people.
Commerce and Industry Minister Piyush Goyal made a statement in both houses of the Parliament, stating that the government is examining the impact of tariffs and will take all necessary steps to safeguard the national interest.
"Government gives utmost priority to the safeguarding of welfare of farmers, labourers, entrepreneurs, industrialists, exporters, MSMEs and stakeholders of the industrial sector. We will take all necessary steps to safeguard our national interest," Piyush Goyal said in Lok Sabha on Thursday.
On April 2, President Trump signed an executive order for reciprocal tariffs on various trade partners, imposing varied tariffs in the range of 10-50 per cent. He subsequently kept the tariffs in abeyance for 90 days, while imposing a 10 per cent baseline tariff. The deadline was to end on July 9, and the US administration later pushed it ahead to August 1.
In March, India and the US initiated talks for a BTA, with the countries stating that the first tranche would be signed by the fall of 2025. (October-November).
US President Donald Trump had imposed reciprocal tariffs on dozens of countries with which the US has a trade deficit. Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to "ensure fair trade".
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