US Imposes 27% Tariffs on India, Calls for Fair Trade

The United States has announced a 27% reciprocal tariff on Indian goods, arguing that India imposes high import duties on American products. The move, part of former President Donald Trump’s broader trade strategy, is aimed at reducing the US trade deficit and boosting domestic manufacturing.

Trump Declares “Liberation Day” for US Industry

Announcing the decision from the White House’s Rose Garden, Trump called April 2, 2025, a “historic moment” for American industry. “We are making America wealthy again,” he declared, holding up a chart comparing US import duties with those imposed by countries like India, China, and the EU.

Trump pointed out that while the US has charged only 2.4% tariffs on motorcycles, India has imposed 70%, Vietnam 75%, and Thailand 60%. He claimed that India’s total import duties, currency policies, and trade barriers add up to 52%, justifying the new 27% US tariff on Indian exports.

Impact on India & Trade Negotiations

While the new tariffs are expected to affect India’s exports, officials say that compared to competitors like Vietnam, China, and Indonesia, India is in a better position. The Indian Commerce Ministry is currently analyzing the impact and negotiating a trade agreement with the US, hoping to finalize the first phase by September-October 2025.

The Federation of Indian Export Organisations (FIEO) acknowledged that Indian businesses would be affected but emphasized that India is in a better position compared to other countries facing even higher tariffs.

US-India Trade Overview

• The US is India’s largest trading partner, accounting for 18% of Indian exports and over 10% of total trade.

• India had a trade surplus of $35.32 billion with the US in 2023-24.

• Major Indian exports to the US: Pharmaceuticals, telecom equipment, precious stones, petroleum products, and cotton garments.

• Key imports from the US: Crude oil, petroleum products, coal, diamonds, electric machinery, and aircraft parts.

What’s Next?

The new tariffs will take effect in two stages:

• April 5 – A universal 10% tariff on all US imports.

• April 10 – The 27% reciprocal duty on India will be applied.

While the situation presents a challenge for Indian exporters, experts believe that a speedy conclusion of trade talks could help reduce the impact. The US has also left room for negotiation, stating that countries addressing US concerns could see a reduction in tariffs.