A- Tariff rate and remarks on India
Trump announced retaliatory duties ranging from 10 to 49 percent for other nations, while a flat 26 percent tariff was applied to all commodities exported by India to the US. According to a White House statement, India levies a 70% duty on passenger car imports, whereas the US only charges 2.5%. While rice attracts 2.7% in the US, it is 80% in India. Apples are permitted to enter the US duty-free, but India charges 50% tax on US apples entering India.
According to the statement, India charges higher tariffs of 10–20% on networking switches and routers, whereas the United States imposes a zero percent duty. The United States and India have a $46 billion trade deficit.
Invest in Indian Markets and Unlock Future Potential With 5paisa!B- Which sectors may be hit the most?
Among the industries most affected by the US tariffs are electronics, which are valued at about $14 billion, and gems and jewelry, which are valued at over $9 billion. While the 26 per cent tariff will not apply to auto parts and aluminium products, those will still attract the 25 per cent tariff that Trump had announced earlier. The White House stated that energy products and pharmaceuticals sector, which according to government data account for almost $9 billion in Indian exports, are excluded from the most recent wave of tariffs.
C- What’s now way ahead for India?
The two countries decided to begin negotiations to reach an early trade agreement and end their tariff stalemate during Prime Minister Narendra Modi’s February visit to the US. According to Reuters, India is willing to significantly lower tariffs on US goods valued at over $23 billion that are shipped to India. According to an internal Indian government analysis that Reuters saw, India can increase its market share in shipments to the US in the textile, apparel, and footwear industries as a result of Trump’s higher tariffs on China. India, which has manufacturing capabilities, sees a chance to increase exports of iron and steel products as well, “especially if tariffs on China are higher,” the report states.
To Summarize
The US has imposed a flat 26% tariff on all Indian exports, while other nations face duties ranging from 10% to 49%. The White House highlighted India’s high tariffs on passenger cars (70%), rice (80%), and apples (50%), compared to significantly lower US duties. Sectors most affected include electronics ($14 billion) and gems and jewelry ($9 billion), while energy and pharmaceuticals are exempt. During PM Modi’s visit, both nations agreed to negotiate a trade deal, with India considering tariff reductions on $23 billion worth of US goods. India also sees an opportunity to boost exports in textiles, apparel, footwear, and iron and steel, particularly as US tariffs on China rise.
