New Delhi, Feb 4 History shows trade announcements by US President Donald Trump often evolve through revisions and reinterpretations, a report has said, adding that the Indian government has neither confirmed stopping purchase of Russian oil, nor mentioned tariff reduction against the US to zero.
The report from JM Financial Institutional Securities also noted that the Indian government has not specified a timeline for buying $500 billion of US energy, technology, agriculture, coal and other products.
"Over the past year, tariff policy has repeatedly been announced, revised, escalated and then softened, often in response to political/strategic goals," the report said, citing example of the US-Korea FTA and Trump's recent threats of tariff hikes against EU countries.
The report added that key sectors that should benefit from tariff reduction are diamonds and jewellery, textiles, machinery, chemicals and automobiles.
India is relatively well placed versus Asian emerging‑market peers with a new US tariff of 18 per cent, lower than China at about 30 per cent and below Bangladesh, Vietnam, Sri Lanka, Pakistan, Indonesia and the Philippines at roughly 19–20 per cent. This could help India gain market share in labour‑intensive sectors such as textiles, the report said.
A US‑India trade deal should enhance dollar flows, improve the balance of payments, lead to INR appreciation and boost Indian equity market sentiments, but the scale of foreign institutional inflows remains uncertain due to high valuations, the report said.
Electronics, India’s largest export category to the US, were largely unaffected by previous tariffs due to exemptions.
The brokerage highlighted that the Indian agricultural goods could face increased competition if India cuts tariffs to zero on US imports.
The US is India’s largest export destination, accounting for about 20 per cent of total exports, and the lower tariff should improve bilateral trade flows and help revive India’s trade surplus with the US. Trade surplus with the US had been rising every year till FY25 before declining in FY26 due to the high tariffs of 50 per cent.
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