By Suresh Unnithan
Despite the silence from India on the tariff war unleashed by President Donald Trump, the US Administration continues its tirade with more acidity. White House Press Secretary Karoline Leavitt, referring to Trump’s “commitment to fair trade policies” , criticised “high duties” imposed by India on American goods and said, “You look at India, there’s a 150% tariff on American alcohol. Do you think that’s helping Kentucky bourbon get into India? Absolutely not.” She further remarked, “on top of that, India imposes a 100% tariff on agricultural products from the U.S.”
Accusing that India has “not treated the U.S. fairly for many years”; she said “President Trump believes in reciprocity. It’s time we have a leader who prioritizes American businesses and workers……All he’s asking for is fair and balanced trade practices.”
Since assuming office for the second term as president of the USA the White House has been saying that these tariffs pose a significant challenge for American businesses trying to enter the Indian market. President Trump had recently claimed, while Commerce Minister Piyush Goyal was in Washington, that India had agreed to lower its tariffs. “India charges us massive tariffs. Massive. You can’t even sell anything in India. They have agreed, by the way; they want to cut their tariffs way down now because somebody is finally exposing them for what they have done,” Trump had said in public recently.
The Trump administration has already announced April 2 as deadline for reciprocal tariff, on goods imported from countries like India, China, Mexico and Canada that “levy higher tariffs on American exports.”
The move has sparked concern among India’s export industries, including automobiles, agriculture, and chemicals. A Citi Research estimate suggests that such measures could cost India nearly $7 billion annually.
For years The US has been India’s major trading partner and India maintains a reasonable trade surplus with America for many years. The Indian export to the US has grown considerably from 2021.
According to reliable statistics in 2023, US-India bilateral trade in goods and services totalled $190.08 billion, with India’s merchandise exports to the US reaching $83.77 billion and imports at $40.12 billion, leaving a $43.65 billion trade surplus in India’s favour.
A recent report from White House says, the US imposes an average 5% tariff on agricultural products, and India’s average tariff stands at 39%. The US also cited India’s 100% tariff on American motorcycles, compared to Washington’s 2.4% tariff on Indian motorcycles.
According to estimates, if the US imposes a uniform 10% tariff hike on all Indian imports, the export drop could be anything around 12% and this could result in a decline of India’s GDP by 50-60 basis points.
However India has already moved to lower tariffs on some products, including high-end motorcycles from 50% to 30% and cutting the levy on bourbon whiskey from 150% to 100%. But New Delhi has, as of now, no intention to lower agricultural tariffs considering the interest of the large number of small scale and marginal farmers.
