By – Munjal Almoula, Head of tax, BDO India
“During ongoing negotiations for a trade deal between India and USA, the President of the United States has announced a 25% tariff on India (and an unspecified penalty). While the levy of additional tariff initially announced on 2nd April was deferred till 1st August to allow negotiation of trade deals with various countries, with this announcement, it is likely that the additional tariff would be imposed on exports from India, unless there is a last-minute extension of time for further negotiation.
The trade deal with USA, one of our biggest trading partners, involves navigating negotiations since there are various sensitive issues like GM crops, imports of dairy products etc., which are important for the Indian economy. Unless there is an agreement on safeguarding India’s interest on these issues as well as other similar issues such as bilateral agreement on digital services tax, stand for continuation for moratorium on customs duty on digital transmissions etc, such a deal may impact India’s interests, and we would need to carefully assess the imperative of any such trade deal.”
