India examining US trade memo; directive on bilateral trade deal positive: Sources

They also said that the White House directive to the United States Trade Representative (USTR) to identify countries with which the US can negotiate agreements on a bilateral or sector-specific basis is a positive development for countries like India. “We are studying and examining the memo. We have to evaluate things before framing any strategy…As of now from a plain reading of that, I do not see something we need to be worried about. Everything that we examine does not translate into action,” one of the sources added.

The government is also awaiting confirmation of appointment of key trade officials in the US. “Confirmations will take a bit of time. Once confirmations happen there will be discussion. India and the US are good trading partners,” the source said.

According to the memorandum, the USTR would identify countries with which the US can negotiate agreements on a bilateral or sector-specific basis to obtain export market access for America and shall make recommendations regarding such potential agreements.

During the first term of President Donald Trump, India and the US had discussed a mini trade deal to boost economic ties. It was shelved by the Biden-administration as they were not in favour of a free trade agreement.

According to international trade experts, India-US trade deal talks could revive in view of the indications given by the memo. Economic think tank GTRI has said that India should respond with equal measures if the US would impose higher tariffs on domestic goods.

President Trump has again warned that he will impose 100 per cent tariffs against countries of the BRICS bloc, of which India is a part, if they take any steps to replace the US dollar.

Trump, who took oath as the 47th President of the US on Monday, said, “If the BRICS nations want to do that, that’s okay, but we’re going to put at least a 100 per cent tariff on the business they do with the United States.” They “have a 100 per cent tariff if they so much as even think” about reducing the use of the dollar in global trade, he added.

BRICS is an intergovernmental organisation of ten countries — Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.

In 2023-24, the US was the largest trading partner of India with USD 119.71 billion of bilateral trade in goods (USD 77.51 billion exports, and USD 42.19 billion of imports and USD 35.31 billion trade surplus).

Trump has also said that he is considering imposing a 10 per cent tariff on Chinese imports starting February 1 to curb the flow of deadly drug fentanyl that Beijing sends to Mexico and Canada.