US Imposes 25% Tariffs on India: Geopolitics and Trade Tensions
UPSC Relevance
Prelims: International Relations (India-US relations), Indian Economy (Foreign Trade, Tariffs, Non-tariff barriers, Balance of Payments).
Mains:
GS Paper 2: Effect of policies and politics of developed countries on India’s interests; Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth.
Key Highlights from the News
American President Donald Trump announced that he would impose a 25% tariff on imports from India starting August 1. In addition to this, there will be a "penalty."
The reasons cited by Trump were:
India's purchase of energy and military equipment from Russia.
India's high tariffs.
India's stringent non-monetary trade barriers.
This unexpected announcement comes amid ongoing negotiations between India and the US for a Bilateral Trade Agreement.
The Indian Ministry of Commerce responded by stating that the implications of this move are being studied and that all necessary steps will be taken to protect the national interest.
There are concerns that this decision will affect the government's commitment to protecting farmers, entrepreneurs, and MSMEs.
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