Tariff issue with US may be resolved in 8-10 weeks: CEA Nageswaran

CEA V Anantha Nageswaran said India and the US could resolve their tariff dispute within 8-10 weeks, as both sides hold talks and look to improve ties

Chief Economic Advisor V Anantha Nageswaran on Thursday said India and the US are likely to reach a resolution on the penal tariffs imposed by Washington within the next two months, news agency PTI reported.

 

Speaking at an interactive session organised by the Bharat Chamber of Commerce in Kolkata, Nageswaran said, “Underneath the surface, conversations are going on between the two governments. My hunch is that in the next eight to ten weeks, we will likely see a solution to the penal tariff imposed by the US on Indian goods.”

What happened

The US imposed an additional 25 per cent tariff on Indian exports in August, taking the total levy to 50 per cent. President Donald Trump cited India's continued purchase of Russian oil, despite US sanctions, as the reason for the additional tariffs.

 

 

The decision has hit Indian exports to the US, which is New Delhi's largest trading partner in goods. Exports fell to $6.86 billion in August, down from $8.01 billion in July. Overall exports also slipped to a nine-month low of $35.10 billion in August from $37.24 billion in July. 

 

Services trade provided some cushion in August. Exports of services were estimated at $34.06 billion, while imports stood at $17.45 billion, leaving an overall goods and services trade deficit of $9.88 billion in August.

India-US ties reset

In recent weeks, India and the US administration have renewed dialogue over trade. Relations between Trump and Prime Minister Narendra Modi also seem to be improving. On Wednesday, Trump called PM Modi on his 75th birthday, a gesture widely seen as an attempt to reset ties.

 

The call marked the first direct interaction between the two leaders since June, when PM Modi firmly rejected Trump’s attempt to take credit for "a ceasefire" between India and Pakistan. According to one report by The New York Times, the Prime Minister even declined four phone calls from Trump during this period.

 

PM Modi even responded to Trump's birthday wishes on social media, stating: “Thank you, my friend, President Trump, for your phone call and warm greetings on my 75th birthday. Like you, I am also fully committed to taking the India-US Comprehensive and Global Partnership to new heights.”

 

Negotiators from both sides are expected to meet this week, raising hopes of progress.