Former Foreign Secretary and Rajya Sabha MP Harsh Vardhan Shringla has expressed hope that India will be able to conclude a "satisfactory mutually beneficial" Free Trade Agreement with the United States as the 50 per cent tariffs take effect on Wednesday, stressing the "close and special partnership" between Prime Minister Narendra Modi and President Donald Trump.

Although some reports suggested that the former diplomat indicated that an agreement was imminent, he actually clarified that he was only hopeful about the possibility. This shows that the Modi-Trump relationship could create space for future trade cooperation but does not confirm an immediate outcome.

Referring to the "Howdy Modi and Namaste Trump" events that reflected the friendship between the two leaders, Shringla pointed out the "connection" that was established during President Trump’s first term.

The Former Foreign Secretary said, "Something that I do know is that President Donald Trump and Prime Minister Modi have a very close and special relationship. It has been clear in many of the meetings that I have attended myself. That bond does not take place of today. It took place during the first term of President Trump in office, when you had such events as Howdy Modi and Namaste Trump."

"Hopefully, we will be able to complete a mutually satisfactory Free Trade Agreement with the United States at an early date and that would definitely lead us to the next level of the visit of President Trump to India," Shringla said.

He explained that India is working to "minimise" the impact of the tariffs and is also exploring alternative markets, mentioning existing agreements with the UK, Australia, and the UAE.

"We would be on the receiving end of 50% customs duties for our exports into the United States of America from India. We are doing our best to reduce the impact. One of the methods is to look for alternative markets. We have Free Trade Agreements with Australia, the UAE, and the UK. We are on the verge of completing a Free Trade Agreement with the European Union. That would mean we would be able to look at alternative markets and we would have the option to divert some of our exports in that direction," Shringla stated.

He expressed confidence in India’s strong ties with the United States and said that shared values and principles would help both countries overcome this tariff issue.

"I am a believer in the relationship. We have the most extensive, most nuanced relationship with the US, that which we have more than any other nation. And the strength of the relationship is the values and principles that we both share, those which will carry us through whatever peaks and troughs there may be in the relationship. We will certainly see this through as well," he added.

Shringla also welcomed the appointment of Sergio Gor as the next US Ambassador to India, describing it as a "positive step."

He further said that India is building capacities in semiconductors and rare earth minerals in collaboration with other countries.

"We are building our own capabilities in partnership with countries such as the US. We are also building a very robust semiconductor capability. We are also undertaking a rare earth mission. We see ourselves expanding over the next 20 years. We need to look ahead to the next phase, and critical and emerging technologies are a very significant component of that," Mr Shringla said.

The 50 per cent tariffs announced by President Trump on Indian goods came into effect today. A report by the Global Trade Research Initiative said that exports from labour intensive sectors could fall by as much as 70 per cent due to these duties.

According to the report, the tariffs will affect a significant share of India’s exports, especially in employment generating industries.

The report stated that 66 per cent of India’s total exports to the US worth 86.5 billion dollars, equal to 60.2 billion dollars in goods, will face duties of 50 per cent or more.

Among the sectors most exposed are textiles, gems and jewellery, and shrimp exports, while around 30 per cent of exports worth 27.6 billion dollars, mainly pharmaceuticals, APIs, and electronics, will remain duty free.