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First Post
2 days ago
- Business
- First Post
Donald Trump claims India is a ‘tariff king'. What the data reveals
US President Donald Trump last week announced he was imposing a 25 per cent tariff on India plus a 'penalty' for buying Russian oil. Trump, who has vowed to raise tariffs on India 'substantially' previously accused India of being a 'tariff king'. But the data doesn't bear Trump's claims out. Here's what we know read more President Donald Trump with Prime Minister Narendra Modi at the White House. The 25 per cent tariff and Russian penalty on India comes even as officials continue to hammer out a trade deal, which has been ongoing since February. File image/AP US President Donald Trump has repeatedly slammed India over tariffs. Trump last week announced he was imposing a 25 per cent tariff on India plus a 'penalty' for buying Russian oil. He has vowed to raise tariffs 'substantially' over the next 24 hours and accused India of fuelling the war in Ukraine. Trump previously accused India of being a 'tariff king'. But does the data back Trump up? How does India compare to its Asian rivals and other nations? STORY CONTINUES BELOW THIS AD Let's take a closer look: What does data show? A closer look at the data shows that Trump's claims are false. India's simple average tariff – which comprises levies on both agriculture and non-agriculture products – is around 16 per cent. This is in the same league as Bangladesh (14.1 per cent), Turkey (16.2 per cent) and Argentina (13.4 per cent). However India's weighted average tariff is only around 4.6 per cent. When looking at tariffs, it is the weighted average tariff that is deemed more important. This is because simple average tariffs measure the duty on all products, even those that make up a fraction of the goods traded. However, weighted average tariffs quantify the actual levy based on the volume of trade. India's weighted average compares favourably with Vietnam (5.1 per cent) Indonesia (5.7 per cent) and the European Union (5 per cent). Of 144 nations, data shows India ranked 64 – lower than competitors such as Bangladesh, Pakistan, and Brazil. India has also placed most of its tariffs on agriculture and automobiles – sectors that have low import volumes. India isn't alone in protecting agriculture either. Switzerland (28.5 per cent), Norway (31.1 per cent), and South Korea (57 per cent) have also done so. When it comes to the US, India in the 2023-24 financial year, imported goods worth $42.2 billion from the US. Almost 75 per cent of this was in 100 key products – most of which have low or negligible tariffs. For example, most of the high-volume US exports to India such as pharmaceuticals, energy products, machinery, and chemicals have tariffs ranging from five to eight per cent. STORY CONTINUES BELOW THIS AD Most of India's imports are duty free under schemes such as Special Economic Zones (SEZs), Export-Oriented Units (EOUs), and Free Trade Agreements (FTAs). For example, India has a zero per cent tariff on semiconductors. India's average most-favoured nations (MFN) tariff on electronics is just 10 per cent, which again compares reasonably well with Vietnam's average MFN of 8.5 per cent. India has also made great strides in cutting tariffs over the years. In 1990, India's average tariff stood at a whopping 80.9 per cent. That rate was slowly brought down post liberalisation to 56 per cent. By 1999, that average tariff was at 33 per cent. By 2023, the simple average tariff had been cut in half at 15.98 per cent. In the last decade alone, India has reduced its weighted average tariff from 7.3 percent to 4.6 percent, India cut its tariffs by over 80 percent in the period between 2001 and 2022. Conversely, EU tariffs decreased 61 percent, and Thailand reduced its tariffs by 56 percent over the same period. STORY CONTINUES BELOW THIS AD Many of these cuts have benefitted the US particularly after 2023 when India brought down levies on exports such as apples, walnuts, and almonds after WTO disputes were resolved. India has also reduced its tariffs or brought them to zero on high-tech goods and solar equipment. The US, meanwhile, continues its own protectionist stance across a number of sectors including autos, textile, agriculture and dairy. WTO data shows that the US, despite importing just 0.1 per cent of its dairy in 2024, levied a MFN tariff of 17.2 per cent. Its top dairy tariff clocked in at a whopping 200 per cent. The US has imposed an average tariff of 19.28 per cent on automobiles, a 23.98 per cent on cheese, between 114.8 and 164.8 per cent on peanuts, an average tariff of 114.80 per cent on tobacco and an average tariff of 197.04 per cent on sour cream. Washington also has imposed a 132 per cent tariff on fruits and vegetables, a 164 per cent tariff on oilseeds, fats and oils, 35 per cent tariff on fish and fish products and a 38 per cent tariff on metals and minerals. STORY CONTINUES BELOW THIS AD What do experts say? They say that India, when it comes to tariffs, compares favourably with its rivals and competitors such as Bangladesh and Pakistan. India also does compares reasonably well with upper-middle-income nations with a higher per capita income like Turkey. They say the data shows India's trade policies have, in the long term, proved to eschew protectionism – even as New Delhi keeps in mind the need to protect its national interest and economically-sensitive sectors such as agriculture. The data shows that India's tariffs, particularly on agriculture, are perfectly in keeping with what other nations are doing around the world. The US, with its own high tariffs and protectionism, is in no position to lecture India. India's weighted average tariff is only around 4.6 per cent, which compares favourably with Vietnam (5.1 per cent) Indonesia (5.7 per cent) and the European Union (5 per cent). Reuters They also say non-tariff barriers, which many view as a means to protect domestic interests, are more difficult to quantify. However, here once again the US argument completely falls apart. For example, the United Nations Conference on Trade and Development (UNCTAD) in 2020 conducted a survey on non-tariff barriers in Asian nations. India on this survey fared better than Japan and South Korea – which the US has treated rather well when it comes to tariffs. China, which is also in negotiations with the US with the Trump administration making conciliatory noises, had a score nearly twice as high as India. China is said to have more than 2,600 non-tariff measures (NTMs), many of which sources have described as intricate and complicated. They say the US under Trump is pushing a narrative that the facts simply don't bear out and that India is being unfairly targeted. STORY CONTINUES BELOW THIS AD With inputs from agencies
NDTV
3 days ago
- Business
- NDTV
India Is Not A "Tariff King": US Claims vs Reality
US President Donald Trump has labelled India as the "Tariff King" and an "abuser" of trade duties, suggesting the country unfairly protects its markets through high customs duties. But a closer look at the facts reveals the claim doesn't hold up against actual trade data and global comparisons. While India's simple average tariff is approximately 15.98%, the trade-weighted average, which better reflects the duties actually applied on traded goods, is only 4.6%, as per World Bank data, much lower than what is commonly believed. Simple vs Weighted Average Tariffs Simple Average Tariffs give equal weight to every product, even those hardly traded. Trade-Weighted Average Tariffs measure the actual duties paid based on trade volume. In India's case: Simple Average Tariff: 15.98% Trade-Weighted Average Tariff: 4.6% This means that most of India's high tariffs apply to sectors with low import volumes, such as agriculture or automobiles. In contrast, the bulk of US exports to India - pharmaceuticals, energy products, machinery, and chemicals - face much lower duties, typically 5-8%, as per official data. A significant portion of India's imports enter duty-free, thanks to various schemes like: Special Economic Zones (SEZs) Export-Oriented Units (EOUs) Free Trade Agreements (FTAs) India's Actual Tariffs On US Goods In FY 2023-24, India imported over $42.2 billion worth of goods from the United States. Nearly 75% of this trade came from only 100 key product categories, and most of these faced low or minimal tariffs. Examples - Crude Oil and LNG: Import duty of Rs. 1.1/tonne and 2.75%, accounting for 18.25% of US imports to India. Industrial Machinery: Tariff of 7.5%, making up 9.75% of imports. Coal: 5% duty, contributing to 8.8% of imports. Medical Equipment: Duties between 5% and 7.5%, with a 4.6% import share. Aircraft and Parts: Low tariff of 2.5%, with 3% of total imports. Fertilisers: Tariff ranging from 7.5% to 10%, making up 1% of imports. Compared To Other Countries When stacked against other countries, both developed and developing, India's tariffs are far from extreme, sources say. As per data from the World Trade Organisation: Electronics And Technology India: 0% on most semiconductors, IT hardware, and computers Vietnam: Up to 50% China: Up to 25% Indonesia: Up to 30% Agricultural Products India: Average 33%, max up to 110-150% European Union: Up to 261% Japan: Up to 298% South Korea: Over 800% on some items While India's simple average tariff stands at 15.98%, as per the WTO, this figure is well within the range of tariffs maintained by other developing nations. For instance: Bangladesh: 14.1% Turkiye: 16.2% Argentina: 13.4% By this measure, India's weighted average is just 4.6%, which is: Lower than Vietnam (5.1%) and Indonesia (5.7%) Nearly equal to the European Union (5%) India Has Been Reducing Tariffs For Decades In 1990, India's average tariff was as high as 80.9%. Following economic reforms in the early 1990s, tariffs were gradually reduced, falling to 33% by 1999. By 2023, India's simple average tariff dropped further to 15.98%, while the trade-weighted average stood at 4.6%. In January, India implemented extra tariff cuts on key US products: Motorcycles above 1600cc: reduced from 50% to 30% Motorcycles up to 1600cc: cut from 50% to 40% Bourbon whiskey: slashed from 150% to 100% Carrier-grade Ethernet switches: halved from 20% to 10% Synthetic flavouring essences and mixtures: steeply reduced from 100% to 20% Fish hydrolysate: lowered from 15% to 5% Equalisation Levy on online services: 6% levy abolished after last year's removal of an additional 2% - significant for the US tech firms In 2023, India removed retaliatory tariffs on major US agricultural exports like apples, almonds, and walnuts after resolving trade disputes. High-tech goods and solar equipment have seen reduced or zero duties in line with India's strategic green energy and digital transition goals. Crucially, major US exports like aircraft and LNG continue to enjoy a low duty regime, facilitating over $5 billion in annual trade. These reductions reflect not only India's broader trade liberalisation over the decades, but also a calibrated effort to strengthen economic ties with the United States through deliberate tariff concessions. India's Non-Tariff Barriers India's regulatory and safety standards are generally less restrictive than those of countries like the EU, Japan, or China. India's Maximum Residue Limits (MRLs) for food products are either matching or less stringent than international Codex standards in 24 out of 32 cases, compared to only 15 out of 52 MRLs in Japan and 6 out of 58 in the EU, as per sources. India's rules on biotech products and veterinary health certification are designed to be transparent, science-based, and consistent with global norms. In contrast, China has over 2,600 non-tariff measures (NTMs), many of which are complex, unpredictable, and create difficulties for foreign exporters, sources said. US Tariffs The United States itself imposes very high duties on several important products. These tariffs, many exceeding 100% are applied across a range of products, including dairy, agriculture, textiles, and autos, reflecting deep-rooted domestic concerns similar to those seen in countries like India. Developed countries like Switzerland (28.5%), Norway (31.1%), and South Korea (57%) also maintain very high agricultural tariffs, often exceeding India's levels, underscoring that protecting agriculture is a global norm. India's tariff policy, especially in agriculture, is thus in line with international norms aimed at safeguarding domestic farmers and ensuring food security, sources said.
Business Standard
27-05-2025
- Business
- Business Standard
Government Restores RoDTEP Benefits for AA, SEZ, and EOU Exports
The Government of India has announced the restoration of benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exports made by Advance Authorization (AA) holders, Export-Oriented Units (EOUs), and units operating in Special Economic Zones (SEZs). The benefits will be applicable for all eligible exports made from 1st June 2025 onwards. The decision comes as part of the government's sustained efforts to boost India's export competitiveness in global markets. The benefits under RoDTEP for these categories were previously available until 5th February 2025, and their reinstatement is expected to provide a level playing field for exporters across sectors.
