PTI New Delhi

The commerce ministry is working on different scenarios to assess the possible fallout of reciprocal tariffs to be imposed by the US administration on April 2 on its key trading partners including India, sources said. US President Donald Trump has said that April 2 will be 'Liberation Day' as he plans to announce tariffs or import duties to bring down America's trade deficit, and promote the country's manufacturing.

India and the US are also working on a bilateral trade agreement to promote two-way commerce and investments. The domestic industry and exporters have raised concerns over the possible impact of the US' reciprocal tariffs on India's exports as the duties could make the goods uncompetitive in the global markets. The US is the largest trading partner of India. While responding to questions in the Oval Office on Monday, Trump said India will be "dropping its tariffs very substantially".

"I heard that India, just a little while ago, is going to be dropping its tariffs very substantially. I said, why didn't somebody do this a long time ago. A lot of countries are going to be dropping their tariffs... If you look at the European Union on cars, the European Union already dropped their tariff to 2.5 per cent. It was announced a couple of days ago. A very small tariff. The United States charged very little," Trump said.

Just a few hours before Trump's comments, the White House said India imposes a 100 per cent tariff on American agricultural products. Sources in New Delhi on Tuesday said that the impact of the US tariffs may vary from sector to sector and the ministry is preparing different scenarios. These scenarios would be important to help domestic companies deal with these duties as it is still uncertain about the quantum and the manner in which the US is planning to impose the tariffs.