India’s Commerce and Trade Ministry has responded to the US government’s decision to impose a 27% tariff on Indian imports, stating that it will continue discussions with Washington while evaluating the potential opportunities that may arise from the policy shift.
The move, announced by President Donald Trump, is seen as a reciprocal measure against India's existing tariffs on American goods.
In an official statement, the ministry highlighted that it is actively engaging with Indian exporters and industries to assess the impact of the tariffs.
The government is also committed to strengthening economic ties with the US through ongoing trade negotiations aimed at concluding a mutually beneficial Bilateral Trade Agreement. These discussions focus on expanding trade, investments, and technological cooperation between the two nations.
India-US Trade Talks Continue
Despite the latest trade tensions, India remains committed to dialogue with the US administration. The Commerce Ministry affirmed that discussions between Indian and US trade teams are progressing towards finalising a deal that covers a range of economic issues, including deeper supply chain integration.
The objective is to foster growth in bilateral trade while ensuring stability in investments and technology transfers.
The US currently has a trade deficit of $46 billion with India. In an effort to mitigate the impact of the tariffs, reports suggest that New Delhi is considering reducing duties on US imports worth $23 billion.
This is aimed at protecting key export sectors such as gems and jewellery, pharmaceuticals, and auto parts, which could be affected by the new tariff structure.
Over the past few years, India has made several concessions to improve trade relations with Washington, including lowering tariffs on premium motorcycles, bourbon whiskey, and withdrawing a tax on digital services that affected American technology companies.
However, these measures have not prevented the recent tariff escalation.
New Tariff Structure and Exemptions
The latest US tariff hike will be implemented in two phases. From April 5 to April 8, a baseline 10% tariff will be applied to all remaining Indian imports. From April 9 onwards, specific Indian goods will be subject to a 27% tariff.
Certain industries have been granted exemptions from the new duties, including pharmaceuticals, semiconductors, and energy products such as oil, gas, coal, and liquefied natural gas (LNG). Copper exports have also been excluded from the tariff hike.
India is not the only country facing increased US tariffs. Other Asian economies, including China (54%), Vietnam (46%), Bangladesh (37%), and Thailand (36%), are also subject to higher duties.
Industry experts suggest that, despite these challenges, India remains in a comparatively stronger position than some of its competitor nations.
Impact on Indian Exports
The United States is a crucial market for India, accounting for 18% of the country’s total exports and 10.73% of bilateral trade. The new tariff regime could significantly impact Indian exporters, particularly in sectors such as jewellery, textiles, and steel.
India’s primary exports to the US include pharmaceutical formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made cotton garments ($2.8 billion), and iron and steel products ($2.7 billion).
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