US Tariff Impact: Govt Mitigation Efforts & Trade Talks

New Delhi, Aug 11 (PTI) The government on Monday asserted that certain red lines cannot be crossed in the trade negotiations with the US and that it is making "focused efforts" as part of an export diversification strategy to mitigate the adverse impact of the high tariff imposed by the US, sources said.

At a briefing to the Parliament's Standing Committee on Foreign Affairs, Foreign Secretary Vikram Misri suggested that India will take up with the US the use of its soil by Pakistan Army Chief Field Marshal Asim Munir for making nuclear threat to New Delhi, the sources said.

Misri and Commerce Secretary Sunil Barthwal briefed the members of the panel headed by Congress MP Shashi Tharoor on the "US India trade negotiations and tariffs" amid uncertainty prevailing over the next round of negotiations scheduled in India from August 25.

Citing the briefing, a source said the trade ties between the two countries were considered to be passing through a "difficult phase" and the government was taking measures to deal with the fallout.

Tharoor told reporters that a question was asked about Munir's "nuclear sabre-rattling", and Misri said India will not tolerate such nuclear blackmail. "It was not good that Munir used the soil of a friendly country to make such a statement, and this message will be conveyed," he added.

He said the US has so far not conveyed anything on a change of schedule for the next round of talks or calling it off.

US President Donald Trump has said that there will be no trade talks with India till the tariff issue is resolved.

A few industries like auto, textile, leather, and gems and jewellery are likely to be particularly hit by the high US tariff, the sources said, citing the briefing by top government functionaries.

The sources said the reference to "red lines" by the top government functionary was related to India's uncompromising stand against the US demand that India open its agri and dairy sectors for its products.

The government was, however, also of the view that the India-US relations should not be seen entirely through the ongoing trade turbulence, exacerbated by Trump singling out India for a sweeping 25 per cent tariff on its goods barring a few sectors like electronics, semiconductors and energy products from August 7.

He slapped an additional 25 per cent tariff on Indian goods as a penalty for New Delhi's continued purchase of Russian oil, which will come into effect from August 27.

Insisting that the two countries are "natural partners" bound by shared democratic values and open societies, the government projected the ties as "enduring, bipartisan and strategic".

Amid the trade uncertainties, the US had designated The Resistance Front, a LeT proxy which claimed the Pahalgam terror strike, as a terrorist organisation, and extradited Tahawwur Hussain Rana, a Mumbai blasts accused, officials told the committee members.

Opposition members raised questions on the recent plunge in the India-US ties, the US hosting Munir and Trump targeting the Indian economy.

An opposition MP asked if it was triggered by the Indian stand on Trump's claim of mediating a "ceasefire" between India and Pakistan, a source said.

Government functionaries told the members that many countries, including traditional US allies, were hit hard by tariffs imposed by Trump but they later managed to negotiate them down by making a few concessions.

As part of "mitigation measures being taken", the government is focusing on "export diversification strategy", making concerted efforts to tap the potential of India's existing trade agreements with partners such as the UAE, Australia, ASEAN, Japan, Korea, and Mauritius, officials said.

Preparations are on to leverage opportunities under new free trade agreement partners such as EFTA (European Free Trade Association) and the UK as soon as the agreements enter into force, they said.

Efforts are on to speedily conclude ongoing negotiations, such as with the EU, on the basis of mutually beneficial and balanced trade, they added.

The officials underlined that the government attaches utmost importance to protecting and promoting the welfare of farmers, entrepreneurs, exporters and MSMEs and will take all necessary steps to secure and advance the national interest.