- Harsh Vardhan Shringla is hopeful for a mutually beneficial India-US Free Trade Agreement
- India faces 50% US tariffs affecting $60.2 billion of exports from key labour-intensive sectors
- India is constantly working to "minimise" the impact, he said, suggesting shifting toward alternative markets
Former Foreign Secretary and Rajya Sabha MP Harsh Vardhan Shringla remains hopeful that India will be able to conclude a "satisfactory mutually beneficial" Free Trade Agreement (FTA) with the US as 50 per cent tariffs kick in on Wednesday, highlighting the "close and special partnership" between Prime Minister Narendra Modi and President Donald Trump.
Contrary to certain reports suggesting that the former diplomat indicated a Free Trade Agreement would happen soon, he actually expressed that he was hopeful about the possibility. This distinction provides important context about how the Modi-Trump relationship could potentially pave a pathway for future trade cooperation, rather than suggesting any imminent certainty.
Referring to the "Howdy Modi and Namaste Trump" events that emphasised friendship between the two leaders, Mr Shringla highlighted the "connection" developed from the US President Trump's first term.
The Former Foreign Secretary said, "One thing that I know is that President Donald Trump and Prime Minister Modi enjoy a very close and special partnership. It's been evident in many of the meetings that I have been present in myself...That connection doesn't come from today. It comes from President Trump's first term in office, when you had events like Howdy Modi and Namaste Trump."
"Hopefully, we will find a way to conclude a satisfactory mutually beneficial Free Trade Agreement with the United States early rather than late, and that would certainly take us to the next step of the visit of President Trump to India," Mr Shringla added.
Mr Shringla said that India is constantly working to "minimise" the impact of the tariffs and suggested shifting toward alternative markets, pointing to India's FTA with the UK, Australia, and the UAE.
"We will be at the receiving end of 50% customs duties for goods exported into the United States from India. We are working on minimising the impact. One way is to find alternative markets. We have Free Trade Agreements with Australia, the UAE, and the UK. We are close to concluding a Free Trade Agreement with the European Union. This means that we can access different markets and we would have the opportunity to divert some of our exports in that direction," Mr Shringla said.
Mr Shringla expressed confidence in India's strong relationship with US and emphasised that through shared values and principles, India will "undoubtedly" see through this tariff issue.
"I believe in the relationship. We have the most comprehensive, multifaceted relationship with the US, the one that we have more than any other country. The strength of that relationship is the values and principles that we share, which will see us through any ups and downs in the relationship. We will undoubtedly see this through as well," he said.
He acknowledged that the appointment of Sergio Gor as the next US Ambassador to India is a "positive step."
Mr Shringla added that India is constantly developing its capacity in the field of semiconductor, rare earth minerals through collaboration with other countries.
"We are developing our own capacities in collaboration with countries like the US. We are also developing a very strong semiconductor capacity. We are also undertaking a rare earth mission...We envision ourselves growing over the next 20 years...We have to prepare for the next stage, and critical and emerging technologies are a very important part of that," Mr Shringla said.
Trump's 50 per cent tariffs imposed on Indian goods come into effect today. According to a report by the Global Trade Research Initiative (GTRI), the exports of labour-intensive sectors in the country brace for a collapse of up to 70 per cent as US tariffs take effect.
As per the GTRI report, it will impact a large portion of India's export basket, particularly in sectors generating massive employment.
The report noted that US tariffs will hit 66 per cent of India's total exports worth $86.5 billion, amounting to $60.2 billion in goods, which will face duties of 50 per cent or higher.
Among the most vulnerable sectors are textiles, gems and jewellery, and shrimp exports. On the other hand, around 30 per cent of exports to the US worth per cent 27.6 billion will remain duty-free, largely dominated by pharmaceuticals, APIs, and electronics.
