NEW DELHI: As Donald Trump returns to White House, government is reviewing India’s import basket to examine if some items being shipped from other countries can be imported from the US, helping it improve the trade balance.
Trump has already flagged his concerns on high import tariffs in a signal that he sees it as a hurdle in pushing American exports to India, which he had earlier described as “tariff king”. Sources indicated that the govt is hoping to address some of the specific concerns, while also seeking to switch the source of import of some of the products.
The assessment is that unlike China, the Trump administration would be more open to engaging with India to see if a mutually beneficial deal can be worked out. Even during his first term in office some of the ticklish issues could be sorted out, with India increasing the import of crude oil from the US, along with defence equipment and airplanes.
India has a large trade surplus with the US, which is its second largest trading partner, after China. During April-Oct 2024, the trade surplus was estimated at over $21 billion. During the last fiscal year, India had a trade surplus of $35 billion on exports of $77.5 billion (see graphic).
At the same time, govt officials have maintained that the trade numbers often cited do not capture the services data. While there has been pressure on the visa side, especially when it comes to professionals, the assessment is that, given the requirement for skilled workers, India will remain an attractive source, especially with the emergence of global capability centres (GCCs).
Separately, govt has identified certain sectors, such as pharma and electronics, where it sees Indian exports gaining due to an increase in tariffs on Chinese imports. Besides, with several of the security restrictions expected to be imposed on China, India could emerge as an attractive bet, govt officials said. But this will also require a ramp up of production capacity within the country, something that govt is nudging the private sector to do, while also taking steps to ensure that there is a robust ecosystem to make India a large production base for some of these products.
