Lagatar24 Desk
New Delhi: India is adopting a cautious “wait and watch” stance following US President-elect Donald Trump’s renewed remarks about imposing reciprocal tariffs on Indian products, a senior trade official said on Wednesday. Trump’s comments, made on Tuesday, targeted India and Brazil for imposing high tariffs on certain American products and hinted at retaliatory measures.
Director General of Foreign Trade Santosh Kumar Sarangi, speaking at a CII export competitiveness event, noted that imposing reciprocal duties would violate WTO norms but acknowledged Trump’s history of unilateral measures under Section 232 of the Tariff Act, citing national security grounds.
“We will need to closely observe how this situation unfolds and the specifics of the measures being considered,” Sarangi said.
India’s Tariff Structure and Potential Impact
India has tariff peaks in certain sectors, particularly agricultural goods, but these are not significant export categories to the US, Sarangi explained. While Trump’s proposed reciprocity could affect specific products, its broader impact may be limited.
Think tank Global Trade Research Initiative (GTRI) highlighted that India’s average tariff stands at 17%, higher than the US’s 3.3% but comparable to nations like South Korea and China. GTRI founder Ajay Srivastava emphasized that Indian tariffs comply with WTO rules, whereas Trump’s proposed tariffs would likely violate them.
“India must be prepared to navigate potential challenges in the Trump era and respond decisively if unilateral tariffs are imposed,” Srivastava said, adding that India’s calibrated response to US tariffs on steel and aluminum in 2018 demonstrated its ability to safeguard trade interests.
India-US Trade Overview
In FY2024, the US was India’s largest trading partner, with exports worth $77.51 billion and imports totaling $42.2 billion. India’s key exports to the US included pharmaceuticals, garments, diamonds, solar cells, and steel products.
While Trump has often labeled India a “tariff king,” critics argue that his claims are exaggerated. Nevertheless, experts suggest India use this moment to strategically review its tariff structure to align with its goals of boosting manufacturing and trade competitiveness.
