Business tension between India and America is once again in discussion. The US has implemented a total tariff on Indian goods. Peter Navaro, senior White House advisor, has sharply criticized India’s trade policies and said that this step was necessary from the perspective of national security.

India is “Maharaja of Tariff” – Peter Navarro
Peter Navarro, the trade advisor of the White House, has called India a “Maharaja of Tariff”. He said that India is the highest tariff country in the world, especially on American products. Apart from this, India’s non-tariff barriers are also very high, which makes American products entry into the Indian market difficult.

Import duty implemented up to 50% on India
After the new tariff effective from August 27, the US has imposed a total fee on Indian goods in total. This step has been described by India as “unfair, unjust and baseless”. Prime Minister Narendra Modi also said that India will not compromise on the interests of its dairy and agriculture sector.

Allegations on India- Russian oil being bought from US dollar
Peter Navaro made a big allegation of America’s trade deficit. He said that America buys huge amounts of goods from India and sends dollars instead. India buys Russian oil from these dollars, and Russia uses the same dollar for war on Ukraine. In this way, Russia gets weapons from America’s money, causing damage to Ukraine.

The purpose of putting tariffs is different from China – Navaro
Navaro made it clear that the purpose of tariffs imposed on India is different from China. He said that this step has been taken by India for not stopping the purchase of Russian oil. While the tariffs imposed on China are “Risiprokel”.

National Security- Trump’s thinking
Navaro said that US President Donald Trump sees economic decisions with national security. He said, “The mathematics that does not work has to be closed. Trump understands that economic security is national security. This is the basic spirit of this decision.”

India’s strict response
India’s reaction to this move of America has been very strong. The Government of India not only described these tariffs as inappropriate, but also said that this will harm the business relations between the two countries. Prime Minister Narendra Modi also clarified that India will not allow its agriculture and dairy sector to harm under any pressure.

The world’s famous electric car company Tesla has finally launched Model Y SUV in India, but this car will not be manufactured in India. It will be brought from the plant in Shanghai as Completely Built Unit (CBU), which leads to heavy import duty on it. The initial price of Model Y has been kept at around 60 lakhs, which removes it from the reach of common Indian customers.

How much is the price of Tesla Model Y?

• Heavy important duty is imposed on foreign cars in India, due to which the price of Tesla Model Y has increased considerably. 70% tax is levied on cars up to $ 40,000 (about 34.38 lakh) and 100% tax on expensive cars. This tax is fixed on the basis of cost, insurance and freight (CIF).
• For this reason, the price of Model Y has reached about 60 lakhs, which is expensive by Indian options like Tata Harrier.Ev and Mahindra Xuv.e9.
• While the price of Tata Harrier.ev is between 21.49 lakh to 30.23 lakh and the price of Mahindra Xuv.e9 is between 21.90 lakh to 31.25 lakhs, Tesla’s model y will not be directly faced by domestic brands like Tata or Mahindra but will be faced with international companies like Tata or Mahindra.

Tesla will affect domestic companies?

• Tesla’s arrival in India will not affect domestic companies because the first reason is the huge price difference. The 6 million car comes in the luxury segment, while the electric vehicles of TATA and Mahindra are made keeping in mind the mid-segment customers.
• Second, Tesla has not opened any local manufacturing unit in India yet, causing its cars to come completely (CBU) and cost expensive. Third, the customer base of this price range cars is very limited in India, so the sale of Tesla will not have any significant impact on the choice of common customers.

What will change with Tesla coming to India?

• According to experts, Tesla’s arrival in India is a positive sign for domestic companies. With this, companies like Tata, Mahindra, MG will pay attention to more innovation, better features and customer experience in their electric vehicles.
• Gaurav Wangal of S&P Global Mobility says that Indian companies will need to work hard in technology and design from Tesla’s entry. At the same time, Som Kapoor of Ey-Parthenon believes that Tesla’s vehicles are quite expensive, so it will not directly affect the market share of companies like TATA or Mahindra.
• India has become an essential market for Tesla at this time. On the one hand, while the EV segment in the world’s third largest automobile market is growing rapidly, on the other hand Tesla’s global sales have fallen 13.5% in the June quarter and it is getting a tough challenge from Chinese companies. It is estimated that India’s EV market can reach 10 lakh crores by 2030 to 22–25% annually.

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India-Rus Trade Deal: Negotiations have reached a significant turn between India and America. According to a CNBC-TV18 report, a mini trade agreement between the two countries may be finally decided in the next 24 to 48 hours. This agreement is being reached at a time when the 90 -day restriction of the additional tariff (Trump Tariff) declared by US President Donald Trump is about to end. In such a situation, this deal can become a relief for India.

Possible points and tariff rates of mini deals
According to the report, the average import tariff under this mini deal will be around 10 percent. There is a plan to fix the annual quota by putting less tariffs on some labor-dominated products to be exported from India. Apart from this, some agricultural products in India, America, such as peccan nuts and blueberries may agree to pay rates. This limited agreement is believed to be a step before the broad bilateral trade agreement (BTA), whose negotiations are likely to begin after July 9.

Trump tariff timeline: from the beginning till now

2 April
US President Donald Trump announced a 10% basic tariff on most imports. He described this day as Liberation Day and said that from April 9, counter tariffs of up to 26-27% will be imposed on those countries, which according to the US are creating unfair trade obstacles. India was also involved in this.

5 April
Trump’s first round tariffs became effective. India started negotiating with the US, reacting quickly and offered to reduce tariffs on some items such as Harley Davidson Motorcycle, Whiskey, Networking and IT Hardware. Also, there was a demand for security of areas like dairy and agriculture.

A formal structure of dialogue between India and America i.e. ‘Terms of Reference’ was agreed. This included reducing tariffs, market access, digital items. Topics such as Intellectual Property Rights were kept separate from this dialogue. India offered to give zero tariffs on some strategic imports under the PLI (Production Based Incentive) scheme and also added the condition “Forward MFN” (Most favorite nation), under which if India gives better trade conditions to another country in future, then America will get the same benefit.

9 April
Trump announced a temporary ban on implementing high tariffs for 90 days. Many countries including India got relief from this decision.

20 and 23 May
India’s Commerce Minister Piyush Goyal met American officials at Washington DC. The goal was to finalize this mini deal by the beginning of July to avoid the potential 26-27% tariffs. India offered limited exemption on American agriculture and industrial products, but excluded domestic sensitive products such as dairy and wheat. On this, Trump appreciated the initiative of Jero Tariff on some goods of India. After this announcement, there was a positive response in the Indian stock market and the Sensex jumped more than 1300 points.

There was a boom in June, but some technical issues are left
The final round of talks between India and the US began in June. Both sides exchanged legal drafts. Final consensus was yet to be reached on technical points like rules, certification, compliance, dispute solution of origin. US officials said that the deal is “90% ready”, but for the final seal it is necessary to consent on certain points.

New signals on the deal from 1 July increased and increased confidence
Foreign Minister S. Jaishankar said that the agreement would be based on the spirit of “both sides giving and taking”. India reiterated that it would keep products like dairy and rice out of the deal, while America wanted to reach the market for more agricultural products.

6 July and 7 July
On 6 July, Trump extended the last date to implement the tariff to 1 August. He appreciated India’s efforts, but also warned the rest of the countries. On July 7, US Fund Secretary Bisnt said that the deal is “very close”. This news brought stability to the financial markets and increased expectations among investors.

On the same day, Trump announced that he would send tariff letters of the first round to various countries, which would also include trade agreements. These letters will be related to the new tariff rates applicable from August 1. Trump also said that countries joining groups like BRICs will have an additional 10% of additional tariffs, including countries like India, Brazil, Russia and China.

Now India’s eyes on mini deal, BRICS membership became a challenge
For India, this mini trade agreement has now become the biggest way to avoid Trump Tariff. However, due to active participation in a group like BRICS, the threat of additional tariffs has also become a new challenge. In such a situation, where India has to protect domestic interests, the global strategic partnerships also have to be balanced.

Free Trade Agreement: India had earlier signed a free trade agreement with Britain and has now approved the FTA with four countries of Europe. The four countries of Europe with which the free trade agreement has been included- Switzerland, Norway, Iceland and Lynchister. This is expected to make many goods cheaper after the customs are zero. According to the report, the free trade agreement will be removed from it. This will make it cheaper like chocolate with Swiss watch. From the month of September, it will be implemented with four other European countries along with Switzerland.

India can come to a big investment

At this time, 30 percent import duty is levied on Swiss chocolate from India. It is believed that high and technology can benefit the most of this agreement. Through this agreement, more than $ 100 billion can be invested in India from these four countries of Europe. It is believed that a big investment in pharmaceutical companies can also come after this agreement.

What is FTA

Significantly, after the agreement with these four countries of Europe, duty on 90 percent of goods will be removed. One of its biggest advantage will be that there will be a big opportunity for those countries as a market in India for investment. However, in these agreement, special care has been taken to the interests of the farmer and products related to agriculture

Actually, after the free trade agreement, the trade between countries is made easier. After this, the customs and subsidy on import-export are either finished or very low. That is, this free trade agreement is completely against the business protectionism of any government.

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Samsung: The Government of India has sent a notice to Samsung and its officials to pay a tax and fine of $ 601 million, or Rs 5,150 crore. The company is accused of using wrong methods to avoid tariffs on the import of Ke-Telicom Equipments. In the last few years, this is the biggest tax demand notice sent to a company.

Tax Demand Big Part of Samsung’s net profit

This tax demand is a large part of Samsung’s last year’s 955 million dollars of net profit. Samsung, one of India’s consumer electronics and smartphone markets, can challenge this notice in a tax tribunal or court. Samsung imports telecom equipment through its network division.

Notice has come before

Earlier in the year 2023, the company received a notice to wrongly classified on 10 percent 20 percent tariffs on the required transmission component used in its mobile towers. With this, Samsung pressurized the tax authority to stop the investigation. Giving clarification, the company had said that a tariff cannot be imposed on the component. While the authorities had known about its classification practice for years.

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