Key Points

In an exclusive interview with IANS on Friday, Chakravorti argued that he wouldn't "rule out" tariffs on Indian generic pharmaceuticals in future.

"This specific move to put tariffs on patented pharmaceuticals is not something that is directly going to affect the Indian manufacturers as much, but it's coming awfully close. So, I wouldn't rule it out that somewhere down the road, tariffs on generic pharmaceuticals as well," he added.

US President Donald Trump announced on Thursday that any patented or branded pharmaceutical products will be subject to a 100 per cent tariff starting October 1, unless the company is building a manufacturing plant in the US.

Commenting on the ongoing negotiations between India and the United States amid the recent crackdown on H-1B visas, Chakravorti believed that "it does make a lot of sense to continue negotiations" on trade issues as well as on the visa changes.

"There is mutual benefit in continuing to have these conversations and find a peaceful settlement to the impasse, particularly the tariff impasse. The H-1B issue is related, but it's a separate issue. I think the two need to be negotiated in parallel, as opposed to in one place," he noted.

Sources have told IANS that New Delhi is pressing for a tariff rate below 20 per cent in its ongoing negotiations with the United States.

The push for tariffs below 20 per cent is viewed as vital to safeguarding India's competitiveness, given that other South and Southeast Asian nations face US tariff rates between 15-20 per cent.

Sources added that New Delhi is also pressing for the removal of the additional 25 per cent tariff on Russian oil purchases, aligning with the Trump administration's view that European nations should curb their imports as well and reiterating that India should not be singled out.

However, Chakravorti, who is a former McKinsey & Company Partner, advised that India should seriously consider reducing its purchase of Russian oil, which would be its "biggest signal" to the Trump administration.

"Any move that India makes in terms of reducing its purchase of oil from Russia is probably going to be the biggest signal from any major country in acting on a set of choices that Trump has made. India can legitimately make the point that this is not economically feasible for India, and it's contributing to Trump's claim that he is effectively campaigning for and bringing peace. That is an offer that India can make," he emphasised.

External Affairs Minister (EAM) S Jaishankar met US Secretary of State Marco Rubio on Monday on the sidelines of UN General Assembly meetings. Commerce and Industry Minister Piyush Goyal and US Trade Representative Jamieson Greer also held discussions in New York, which the Indian side termed as "constructive meetings"

"Both sides exchanged views on possible contours of the deal and it was decided to continue the engagements with a view to achieve early conclusion of a mutually beneficial Trade Agreement," the Commerce Ministry statement added.

Chakravorti acknowledged that Trump's current economic policies are hurting the US economy, but for the other countries, there is no substitute for the American market in the near term.

"The US economy is already suffering, and it's going to continue to suffer, and the consumer demand is going to be hit. So, you need to look for alternative markets. Give me an alternative. You can put together 50 markets and still it doesn't come close to covering the deficit," he asserted.

For both the near and long term, Chakravorti believed India should strive for a better relationship with the United States.

"The biggest problem right now is Trump. But to some extent, Trump is also transparent in terms of what gets him upset and what makes him happy and how you can get him to come to your side. If you start with that as a motivation, you then need to develop a strategy around. That's the kind of thing that India needs to do in the near term and over the longer term, India needs to have a campaign to build back that relationship, which, in the moment seems to be broken," he concluded.

- IANS