'Mixed bag, not a setback': India evaluates impact of Trump's 26% tariff, hopes for reduction
India assesses the impact of Trump's 26% tariff on exports and explores diplomatic options for possible reductions.
India is closely assessing the economic implications of the 26% import tariff imposed by US President Donald Trump on Indian exports, with hopes of securing a reduction through ongoing trade negotiations. Officials from the Ministry of Commerce are analysing the impact of the tariffs, which were announced as part of the US administration's new trade policy aimed at enforcing reciprocal duties on foreign nations.
"The ministry of commerce is analysing the impact of the announced tariffs," an official said. India is currently engaged in negotiations with the US to finalise the first phase of a bilateral trade agreement by September-October. The official indicated that a reduction in tariffs could be possible if India’s concerns are addressed. "It is a mixed bag and not a setback for India," the official added.
Latest Videos
Meanwhile, the exporters' body FIEO stated that while the tariffs on India will undoubtedly impact domestic players, an early conclusion of the trade agreement would offer relief.
"We have to assess the impact, but looking at the reciprocal tariffs imposed on other countries, we are in a lower band. We are much better placed compared to our key competitors such as Vietnam, China, Indonesia, Myanmar, etc. We will definitely be affected by the tariffs, but we are much better placed than many others," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai was quoted as saying in a PTI.
Donald Trump Announces 26% "Discounted Reciprocal Tariff" On India
US President Donald Trump has framed the new tariffs as a reciprocal measure, stating that he is being lenient with India and China by imposing duties lower than what he claims those countries charge the US. "The US will charge an import duty of 26 per cent on India and 34 per cent on China," he said.
US President Donald Trump imposes 26% "reciprocal tariffs" on India, followed by 34% on China, 20% on EU, and 24% on Japan pic.twitter.com/0uhLSCKSOV
— ANI (@ANI)Addressing India's trade policies, President Trump remarked, "Their Prime Minister (Narendra Modi) just left (US recently)...he is a great friend of mine, but I said to him that 'you're a friend of mine, but you've not been treating us right'. India charges us 52 per cent, so we will charge them half of that - 26 per cent."
| Washington | Speaking at the Make America Wealthy Again Event, US President Donald Trump says, "India very, very tough. The Prime Minister just left and is a great friend of mine, but you are not treating us right. They charge us 52 per cent and we charge them almost… pic.twitter.com/bQ1qH1OEfI
— ANI (@ANI)In addition to India and China, the US has imposed new tariffs on several major trading partners, including a 20% levy on imports from the European Union, 10% on the UK, and 24% on Japan. These tariffs will be applied on top of a 10% base duty on all imported products, as part of a broader effort to address trade imbalances.
The announcement was made at the White House Rose Garden to loud cheers, with President Trump declaring, "For far too long, other countries have looted and plundered us, while taking advantage of our policies. But no longer. April 2nd will forever be known as Liberation Day - when America reclaimed its industries. We will now impose reciprocal tariffs on countries that tariff us - Reciprocal means we do to them, what they do to us, as simple as that."
He further stated, "By doing this we will reclaim our jobs, we will reclaim our industry, we will reclaim our small and medium scale businesses...and we will make America wealthy again. Jobs will come roaring into America now."
Following the "Liberation Day" tariff announcement, the White House informed reporters that the US is imposing a "baseline" 10% import duty on all goods due to a "national emergency" linked to trade deficits and security concerns. This base tariff will take effect at 12:01 am local time (9:30 am IST) on April 5, with the higher country-specific tariffs beginning at 12:01 am local time (9:30 am IST) on April 9.
US Remains India’s Largest Trading Partner, Trade Surplus at $35.32 Billion in 2023-24
From 2021-22 to 2023-24, the United States remained India's largest trading partner. The US accounted for approximately 18% of India's total goods exports, 6.22% of imports, and 10.73% of overall bilateral trade.
India maintained a trade surplus with the US, with the gap between exports and imports reaching USD 35.32 billion in goods in 2023-24. This figure stood at USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22, USD 22.73 billion in 2020-21, and USD 17.26 billion in 2019-20.
In 2024, India's key exports to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), gold and other precious metal jewelry (USD 3.2 billion), ready-made cotton garments and accessories (USD 2.8 billion), and iron and steel products (USD 2.7 billion).
On the import side, India's major purchases from the US comprised crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal and coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electrical machinery (USD 1.4 billion), aircraft, spacecraft, and related parts (USD 1.3 billion), and gold (USD 1.3 billion).
subscribe to Asianet Newsable WhatsApp channel by clicking here.