The Commerce Ministry of India is analysing the impact of the 26% tariff imposed by the US. The ministry states it's a mixed bag and not a setback. Exemptions are expected in sectors like pharmaceuticals, semiconductors, and critical minerals. The tariff ranges from 10% to 26% across various sectors. India aims to sign a Bilateral Trade Agreement with the US by fall this year.
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00:00The first response coming in from India on the 26% tariff that has been imposed on our country.
00:06Remember, this is in response to over 50% Donald Trump says that India levies on American goods.
00:13Here's what India has said.
00:15The tariffs are a mixed bag, but it's not a setback.
00:18Commerce Ministry has said we are analysing the impact of the 26% tax.
00:22First 10% tariff already kicking in from the 5th of April.
00:27Remember there will be, of course, a finer blueprint here.
00:30There will be a lot of terms and conditions that will come in.
00:33It's not just about a number of 26% or 30%.
00:36I want to bring in a foreign affairs editor, Geeta Mohan.
00:39Also joining me, Karishma Sudhani from Business Today Television.
00:42Geeta, go ahead. How are you looking at this specifically with regard to India?
00:48Do you think it's a fair discounted tariff, as he says, or perhaps should have been much lower?
00:53Or how are you also then looking at the geopolitics angle of it?
00:57Globally, how's the world responding?
00:59Let's just begin with globally. There is a benchmark.
01:03There is a 10% tariff that is going to be levied on all countries.
01:09There are massive reactions that are coming in.
01:11Some are saying that this is not what friends do,
01:14but are not going to go ahead with reciprocity in terms of Australia.
01:21China is saying they're going to hit back.
01:23But what is coming or the reactions that are coming from India are quite interesting.
01:28Commerce Ministry right now analyzing details of what's really happening
01:32and how it is going to impact India.
01:35There are four major areas, or five to be precise,
01:38where these duties, these tariffs could be impacted.
01:43India does export electronics, gems and jewelry,
01:47nuclear manufacturing or plant materials, parts, and petrol.
01:55Also very important over here is the fact that there is the analysis that has happened
02:01and there are reports coming in that the Indian side thinks it's a mixed bag
02:07and not an absolute setback.
02:10They are talking about how there could be exemptions to certain areas.
02:16We have to really look into the details of what those exemptions could really mean.
02:20It's not a setback is what the Indian side is saying and that it is certainly a mixed bag.
02:26So again, are the sensitive areas, Pooja, like the agro sector, the agricultural sector,
02:34going to get some relief in all this is something we'll have to wait and see.
02:39Pharma certainly is going to be impacted apart from the other four that I mentioned earlier.
02:43The areas that are going to be impacted, it could vary from 10% to 26%.
02:49Again, Commerce Ministry analyzing which are the areas
02:53that are going to be majorly impacted by this decision.
02:56And for India, India is on a time frame.
03:01We are looking at the BTA.
03:03The BTA bilateral trade agreement has to be signed by fall of this year.
03:07And then maybe things will ease out for India and between India and the United States of America.
03:13Up until then, what is India going to do with these tariffs and what are the exemptions?
03:18Very interesting. We'll see how the markets also will respond as Geeta is telling us.
03:22Remember, did not make a direct mention of the pharma sector, the agro sector.
03:25But will that find in how the markets are going to respond?
03:28The uncertainty that there was ahead of Donald Trump's announcement.
03:31Stay on with me, Geeta. Also joining me, Karishma Sudhani.
03:34And we have more news coming in.
03:36Remember, this is amid the exemptions also that have come.
03:39Karishma, I want to first bring you in here about what Geeta has also been suggesting.
03:43That he did make a lot of personal remarks, but there will be a lot of fine details,
03:48find a blueprint that will have to be looked at.
03:51And what do we mean when we say the Commerce Ministry is analyzing this 26%?
03:57Well, Pooja, it's been quite a few days now that the ministry was prepping up for this impact.
04:04Definitely, it's not been fully wavered for us, but we are still on the safe line.
04:09In fact, if you go through the fine print of the text,
04:12you will see that the legal provisions outline specific groups that are exempt from this percentage based tariffs.
04:20And the sectors that the text here mentions includes across semiconductors,
04:25across automobiles, pharmaceuticals, which are big sectors that India has been exporting to US on.
04:32In fact, close to about 35% of our exports on farmers are let alone to US.
04:38So there are existing exemptions already.
04:41And somewhere I think India is going to be the silent hero in this,
04:47which of course will be analyzed by Commerce Ministry.
04:50To what extent are we going to get these exemptions?
04:55Tell me about this big silver lining, possibly when it comes to pharma, semiconductor,
05:01which in many ways India is promoting at a significant level.
05:06We are told that pharma and semiconductor chips have been exempt from the tariff.
05:10There's Annex 2 of the Trump order that's giving a certain leeway to India.
05:15Copper, lumber articles, critical minerals have also been exempt.
05:19As more and more details come in on this, Karishma, tell me more.
05:23Because that's what I think when the ministry is analyzing,
05:25it will want to see all these negotiations up until now.
05:29And the friendship with Prime Minister Modi,
05:31has it resulted in any sort of the tariff relief that we were expecting?
05:35Pooja, it's very important for us to understand that these exemptions have already been subject
05:42to Section 232 tariffs under various past presidential proclamations.
05:47So we yet do not know that in what percentage or what parts of these sectors
05:52are we going to get a clear exemption.
05:54And even if it is a clear exemption or not,
05:56it's a partial exemption pertaining to certain intricacies that are involved.
06:01But sectors like copper, pharmaceutical, semiconductor, critical minerals,
06:06energy products and also auto products being listed on this
06:11can actually work out big for us.