This article was published in The New Indian Express 06 March, 2025
The United States has announced reciprocal tariffs on India, set to take effect on April 2, signaling a tougher phase in ongoing Free Trade Agreement (FTA) negotiations. President Donald Trump made the announcement while defending his administration’s strict trade policies, emphasizing that the US has long faced unfair trade practices, including high reciprocal tariffs from countries like India, China, and the European Union.
Despite this, New Delhi remains optimistic about resolving trade issues. The Indian government believes that the understanding reached between Prime Minister Narendra Modi and President Trump on February 13 will help keep negotiations on track, with hopes of signing the first phase of the FTA by September. To further these discussions, Commerce and Industry Minister Piyush Goyal has embarked on a US visit to meet with the newly appointed United States Trade Representative (USTR), Jamieson Greer.
During his address to Congress, President Trump reiterated his long-standing criticism of high tariffs imposed on American goods. He particularly highlighted India’s reciprocal tariffs, describing them as unfair trade barriers. “India charges us 100 percent tariffs; the system is not fair to the US. On April 2, reciprocal tariffs kick in. Whatever they tax us, we will tax them. If they use non-monetary tariffs to keep us out, we will do the same,” Trump stated.
Previously, Trump had referred to India as the “tariff king,” specifically pointing to the automobile sector. He noted that while India imposes reciprocal tariffs exceeding 100% on American vehicles, the US maintains far lower duties on Indian imports. This imbalance, according to Trump, has contributed to an unequal trade relationship.
Following the announcement, the White House released a factsheet outlining India’s tariff policies. The report highlighted that while the US applies an average Most Favored Nation (MFN) tariff of just 5% on agricultural goods, India’s average MFN tariff stands at 39%. Additionally, India imposes a 100% tariff on American motorcycles, whereas the US only charges 2.4% on Indian motorcycles.
Despite rising tensions, Indian officials believe that diplomatic channels can help resolve trade disputes. A government source stated, “We have a roadmap to ensure trade issues are sorted out through mutual consultations.” The evolving trade relationship between the two nations will be crucial in shaping future agreements and maintaining economic stability.
With the deadline for the FTA’s first phase approaching, the focus will be on whether both countries can navigate these tariff disputes and reach a balanced agreement.
Read More at The New Indian Express
Find more Global Indian Top Reads