Trump Tariff : In a bold move aimed at reducing trade deficits and boosting American manufacturing, former U.S. President Donald Trump announced a 26% reciprocal tariff on Indian imports. Labeling April 2, 2025, as ‘Liberation Day’, Trump emphasized that this decision marks the beginning of America’s resurgence in trade and industry.
Table of Contents
Why Trump Imposed Tariffs on India
Trump has long been vocal about what he considers unfair trade practices by other countries. According to him, India imposes high import duties on American products while the U.S. historically charged far less. Citing the example of motorcycles, he pointed out that while the U.S. levies only 2.4% tariffs, India charges a staggering 70%.
He expressed his dissatisfaction, stating:
“India, very, very tough. The prime minister just left. He’s a great friend of mine, but I said, you’re a friend of mine, but you’re not treating us right. They charge us 52 per cent. You have to understand, we charge them almost nothing for years and years and decades.”
Trump Tariff : Impact on Indian Trade & Key Sectors
The Commerce Ministry of India is currently analyzing the repercussions of these tariffs. While it may impact India’s exports to the U.S., officials believe India is still better placed than competitors like Vietnam, China, Indonesia, and Myanmar, who also face similar tariff hikes.
Key Indian Sectors Affected:
Pharmaceuticals & Biologicals – One of India’s largest exports to the U.S. ($8.1 billion in 2024), the sector may experience disruptions.
Telecom Instruments – With an export value of $6.5 billion, telecom players may feel the pinch.
Jewelry & Precious Stones – Exports worth $5.3 billion in semi-precious stones and $3.2 billion in gold jewelry could suffer.
Petroleum Products – A $4.1 billion export segment that might face reduced demand.
Cotton Garments & Iron/Steel Products – Industries contributing billions to the U.S. market will likely see cost escalations.
Trade Negotiations & Future Prospects
Despite the tariffs, India and the U.S. are negotiating a bilateral trade agreement, with the first phase expected to be finalized by September-October 2025. According to an Indian trade official:
“It is a mixed bag and not a setback for India. The early conclusion of the trade agreement would provide relief from these tariffs.”
The Federation of Indian Export Organisations (FIEO) also remains optimistic. FIEO Director General Ajay Sahai stated:
“We have to assess the impact, but compared to our competitors, we are in a lower band. We are much better placed than many others.”
India-US Trade Volume at a Glance
The U.S. has been India’s largest trading partner since 2021, contributing to 18% of total goods exports and 10.73% of bilateral trade. Despite fluctuating trade surpluses, India’s surplus with the U.S. stood at $35.32 billion in 2023-24.
Major U.S. Imports from India (2024):
Pharmaceuticals – $8.1 billion
Telecom Instruments – $6.5 billion
Jewelry & Precious Stones – $5.3 billion
Petroleum Products – $4.1 billion
Cotton Garments – $2.8 billion
Major U.S. Exports to India (2024):
Crude Oil – $4.5 billion
Petroleum Products – $3.6 billion
Coal & Coke – $3.4 billion
Diamonds (cut & polished) – $2.6 billion
Aircraft & Spacecraft Parts – $1.3 billion
Challenge or Opportunity?
While the tariff imposition presents a short-term challenge for Indian exporters, experts believe India’s resilience and ongoing trade negotiations could turn this into an opportunity. With a potential trade agreement in sight and India’s competitive advantage over other nations facing similar tariffs, the country may still navigate these hurdles effectively.
As the situation unfolds, all eyes will be on the India-US trade talks, which could define the future of economic relations between the two largest democracies in the world.
Full list of countries and how much reciprocal tariff Trump has imposed:
Country
US Reciprocal Tariffs (%)
China
34%
European Union
20%
Vietnam
46%
Taiwan
32%
Japan
24%
India
26%
South Korea
25%
Thailand
36%
Switzerland
31%
Indonesia
32%
Malaysia
24%
Cambodia
49%
United Kingdom
10%
South Africa
30%
Brazil
10%
Bangladesh
37%
Singapore
10%
Israel
17%
Philippines
17%
Chile
10%
Australia
10%
Pakistan
29%
Turkey
10%
Sri Lanka
44%
Colombia
10%
Peru
10%
Nicaragua
18%
Norway
15%
Costa Rica
10%
Jordan
20%
Dominican Republic
10%
United Arab Emirates
10%
New Zealand
10%
Argentina
10%
Ecuador
10%
Guatemala
10%
Honduras
10%
Madagascar
47%
Myanmar (Burma)
44%
Tunisia
28%
Kazakhstan
27%
Serbia
37%
Egypt
10%
Côte d’Ivoire
21%
Laos
48%
Botswana
37%
Trinidad and Tobago
10%
Morocco
10%
Algeria
30%
Oman
10%
Uruguay
10%
Bahamas
10%
Lesotho
50%
Ukraine
10%
Bahrain
10%
Qatar
10%
Mauritius
40%
Fiji
32%
Iceland
10%
Kenya
10%
Liechtenstein
37%
Guyana
38%
Haiti
10%
Bosnia & Herzegovina
35%
Nigeria
14%
Namibia
21%
Brunei
24%
Bolivia
10%
Panama
10%
Venezuela
15%
North Macedonia
33%
Ethiopia
10%
Ghana
10%
FAQ
1. What is Donald Trump’s 26% tariff on India?
Donald Trump has announced a 26% reciprocal tariff on Indian goods, citing high import duties imposed by India on American products.
2. Why has the US imposed tariffs on India?
The US claims that India imposes higher duties on American goods, and the tariff aims to create a level playing field in trade between the two nations.
3. Which Indian industries will be affected the most?
Key industries likely to be impacted include pharmaceuticals, jewelry, textiles, petroleum products, and telecom instruments.
4. How will this tariff affect India-US trade relations?
The tariff could lead to increased trade tensions but may also push both nations to accelerate a bilateral trade agreement to resolve disputes.
5. When will the new tariffs come into effect?
The universal 10% tariff will apply from April 5, 2025, and the 26% tariff on India will be enforced from April 10, 2025.
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