$48.2 bln of India's goods exports to US to be subject to 50% tariffs: Govt to Parliament

Time of India

3 hours ago

It is estimated that around $48.2 billion of India's merchandise export to the US will be subject to the US' 50%, government told Lok Sabha Tuesday.
Reciprocal tariff at the rate of 25% has been imposed on certain goods exported from India to the US starting from August 7, 2025. Further, additional ad valorem rate of duty of 25% with effect from August 27, has been imposed on certain goods exported from India.
'The government has taken note of tariff imposition by the US,' said minister of State for Commerce and Industry Jitin Prasada in a written reply to the Lok Sabha.
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'It is estimated that around $48.2 billion of India's merchandise export (based on 2024 trade value) to the US will be subject to the above additional tariffs. Government is committed to secure and advance country's national interest and protect the welfare of our farmers, workers, entrepreneurs, exporters, MSMEs and all sections of industry and take all necessary steps to help mitigate impact on trade including through appropriate export promotion and trade diversification measures.
India and the US are negotiating a multi-sector Bilateral Trade Agreement (BTA). So far, five rounds of talks have been completed between the two countries on the proposed BTA. The US trade team has recently postponed their visit for the sixth round of negotiations, which was scheduled from August 25.
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'As a part of negotiations, among other things, both sides are engaged in discussions on liberalization
of trade in goods including non-sensitive agricultural products, with the aim to expand trade and deepen the India-US trade relationship,' Prasada said in a separate reply.
He said the government is engaged with all relevant stakeholders including agriculture, farming experts, to assess the interests and requirements of India's rural economy, farmers and agricultural sector.
'Government is committed to take all necessary steps to secure and advance country's national interest and protect the welfare of our farmers, rural economy and agriculture sector,' he stated.
During April-July FY25, India's overall exports to the US were $33.53 Billion, compared to $27.56 Billion in the same period of the previous year, reflecting a growth rate of 21.64%.
'Government is engaged with all stakeholders including exporters and industry for taking feedback of their assessment of the situation,' Prasada told Parliament.
In an another reply, the minister said the US has announced countervailing duties (CVD) on export of Melamine, Hexamine, Epoxy Resins, Ceramic Tile, Hard Empty Capsules, Overhead Door Counterbalance Torsion Springs, and High Chrome Cast Iron Grinding Media from India in the period January to July 2025.
US double tax pact
In a separate reply, he said that India has entered into a
Double Taxation Avoidance Agreement
with the US that is applied on the corporate taxation of Indian companies there.
'The benefits available in this Agreement remain unchanged irrespective of the domestic laws of US,' he said, adding that the US has not implemented the global minimum tax rules so far, and has stated that the commitment made by prior administration on it shall have no effect in US unless they are adopted in its domestic laws.
'This is unlikely to affect taxation of Indian companies in United States. U.S. Corporate tax changes generally apply to entities with U.S. tax liability and are not expected to directly affect exporters that sell from India,' he added.
The minister said that the overall impact of depreciation of Indian rupee against the US dollar on th conomy depends on multitude of factors and cannot be isolate
'Government is engaged with all relevant stakeholders including industry to protect country's economic and commercial interests and to mitigate impact on trade through all appropriate steps including export promotion and trade diversification,' he said.
China rare earths
The recent imposition of export restrictions on key rare earth magnets by China
has resulted in a supply chain bottleneck, impacting the Indian industries including electric vehicle manufacturers, government told Lok Sabha.
'Consultations have been held regularly with relevant stakeholders to explore measures to address the issue,' Prasada said in a written reply.
He said the mines ministry has been working to ensure supply chain resilience for critical minerals including Rare Earth Elements, which are used in producing Rare Earth Magnets, as they are key materials for different sectors including electric vehicles.
He said that in the interest of developing bilateral cooperation with countries having rich mineral resources, ministry has already entered into bilateral agreements with governments of a number of countries such as Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi, Cote D'Ivoire and International organizations such as International Energy Agency (IEA).
Further, Khanij Bidesh India Limited (KABIL), a Joint Venture Company set up with the objective to identify and acquire overseas mineral assets that hold critical and strategic significance, is engaged in this area by developing collaboration with various organisations based in different countries.