The effectiveness of commerce offers with the US has come below recent scrutiny as US President Donald Trump on Friday expanded the tariff internet to a number of merchandise, together with patented medicine and heavy vehicles that have been beforehand exempted from reciprocal tariffs. Trump’s transfer assumes significance as India is in the course of negotiations with the US, and the elimination of reciprocal tariffs is a key ask from the Indian facet, although sectoral tariffs should not a part of the talks.
Whereas the tariffs on pharma medicine might not have an effect on India within the quick time period, specialists stated that using Part 232 is already impacting India’s metal and aluminium producers, and growth of tariffs might additional damage exports even after the commerce deal. Authorities officers stated {that a} new investigation might result in extra merchandise with metal and aluminium dealing with greater tariffs within the US.
A number of Questionmarks
Deborah Elms, Head of Commerce Coverage on the Singapore-based Hinrich Basis, stated that recent sectoral tariffs below Part 232 increase a number of questions on whether or not or not they’re coated below any current bilateral commerce offers. The US has already pushed for steep asks from India to signal a commerce deal. Variations over India’s buy of Russian oil have already been a flashpoint between India and the US.
On increasing use of Part 232, Simon Evenett, Professor at Switzerland-based IMD Enterprise College, stated that the US is quick increasing nationwide safety investigations on a spread of merchandise that raised a number of considerations. “The selection of Part 232 over different commerce instruments isn’t unintended. In keeping with authorized specialists, Part 232 tariffs are troublesome to problem in courts—in contrast to the IEEPA tariffs presently dealing with Supreme Courtroom evaluation. It’s a calculated transfer to create extra legally bulletproof commerce obstacles,” Evenett stated.
Evenett emphasised that there are 12 concurrent Part 232 investigations throughout sectors from semiconductors to wind generators, and this represents a “elementary shift towards prioritising safety considerations over openness, buyer selection, and aggressive pricing”. “Fairly than the broad-based tariff bulletins we noticed in April 2025, this Administration is now deploying a slice-by-slice method. This probably displays classes realized from antagonistic monetary market reactions to blockbuster tariff packages,” he stated.
Consultants additionally stated that a number of Part 232 investigations might have a hidden agenda, equivalent to within the case of robots. Whereas nationwide safety considerations round robotics are authentic, there’s probably one other motive at play. “Imposing excessive robotic tariffs (traditionally within the vary of 25-100 per cent below Part 232) would artificially inflate home robotic costs, pushing corporations towards hiring native staff over automation—a backdoor employment creation technique,” Evenett stated.
India’s Stance
In indicators that India might not obtain reduction for Part 232 tariffs below the commerce deal, New Delhi has begun approaching the WTO towards sectoral tariffs and has additionally indicated retaliation. Minister of State for Commerce and Business Jitin Prasada, in a written reply to a parliamentary query earlier this yr, stated that the US has refused discussions within the WTO over metal and aluminium tariffs, citing nationwide safety.
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“India has accordingly reserved its proper to droop considerably equal concessions (proper to impose equal commerce measures in response) because of the US’s non-compliance with its obligations below the Settlement on Safeguards (AoS),” Prasada stated.
The Commerce and Business Ministry on Friday stated that India and the US “exchanged views on potential contours of the deal” and it was determined to proceed the engagements with a view to reaching early conclusion of a mutually helpful Commerce Settlement. “The Minister had conferences with Ambassador Jamieson Greer, United States Commerce Consultant and Sergio Gor, U.S. Ambassador-designate to India. Other than conferences with the U.S. Authorities representatives on bilateral commerce issues, the delegation held discussions with key U.S.-based companies and buyers on selling commerce and funding between India and the US,” the Ministry stated.
The delegation had constructive conferences with the U.S. Authorities on varied facets of the deal. Either side exchanged views on potential contours of the deal, and it was determined to proceed the engagements with a view to reaching early conclusion of a mutually helpful Commerce Settlement.
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