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Khaleej Times
03-04-2025
- Business
- Khaleej Times
Trump hits India with 26% tariff, adding pressure on Modi over trade deficit
The U.S. slapped a 26% reciprocal tariff on India in a setback to the South Asian country's expectation of getting relief from President Donald Trump's global trade policy that has unnerved world markets for weeks. The reciprocal tariff will be effective from April 9, according to a statement from the White House. Trump's Wednesday announcement on India was part of his wider plan to impose a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries including 34% on China and 46% on Vietnam. "They (India) are charging us 52% and we charge almost nothing for years and years and decades," Trump said at the White House while announcing the reciprocal tax. The duty of 26% was based on tariff and non-tariff barriers including currency manipulation, the Trump administration said. India imposed "uniquely burdensome" non-tariff barriers, the removal of which will increase U.S. exports by at least $5.3 billion annually, the White House said in a statement. The tariffs would remain in effect until Trump determined that the "threat posed by the trade deficit and underlying non-reciprocal treatment is satisfied, resolved, or mitigated," the statement added. The U.S. has a trade deficit of $46 billion with India. The reciprocal tariff will add pressure on Indian Prime Minister Narendra Modi, who counts himself among Trump's friends, to find ways to get India off the hook. Last week Reuters reported that New Delhi is open to cutting tariffs on U.S. imports worth $23 billion to mitigate the impact on its exports in sectors like gems and jewellery, pharmaceuticals and auto parts. Modi's administration has taken a number of steps to win over Trump by lowering tariffs on high-end bikes, bourbon and dropping a tax on digital services that affected U.S. tech giants. Before the reciprocal announcement, the U.S. tariff rates were among the lowest, with simple average tariffs at 3.3%, compared with India's 17%, the White House said. Nigel Green, CEO of global financial advisory deVere Group, said the U.S. duties risked pushing India closer to alternative trade blocs and strategic partners. "(This) makes Indian exports immediately less competitive ... it dents investor confidence just as India is trying to attract global capital fleeing China," he said. Ajay Sahai, director general at the Federation of India Export Organisations, said the reciprocal tariff on India was lower than key competitors like Vietnam and Bangladesh, which could help Indian apparel and footwear sectors.
Yahoo
03-04-2025
- Business
- Yahoo
US slaps 26% tariff on India amid ongoing bilateral trade talks
By Aftab Ahmed, Manoj Kumar and Shubham Batra NEW DELHI (Reuters) - The U.S. slapped a 26% reciprocal tariff on India in a setback to the South Asian country's expectation of getting relief from President Donald Trump's global trade policy that has unnerved world markets for weeks. The reciprocal tariff will be effective from April 9, according to a statement from the White House. Trump's Wednesday announcement on India was part of his wider plan to impose a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries including 34% on China and 46% on Vietnam. "They (India) are charging us 52% and we charge almost nothing for years and years and decades," Trump said at the White House while announcing the reciprocal tax. The duty of 26% was based on tariff and non-tariff barriers including currency manipulation, the Trump administration said. India imposed "uniquely burdensome" non-tariff barriers, the removal of which will increase U.S. exports by at least $5.3 billion annually, the White House said in a statement. The tariffs would remain in effect until Trump determined that the "threat posed by the trade deficit and underlying non-reciprocal treatment is satisfied, resolved, or mitigated," the statement added. The U.S. has a trade deficit of $46 billion with India. The reciprocal tariff will add pressure on Indian Prime Minister Narendra Modi, who counts himself among Trump's friends, to find ways to get India off the hook. Last week Reuters reported that New Delhi is open to cutting tariffs on U.S. imports worth $23 billion to mitigate the impact on its exports in sectors like gems and jewellery, pharmaceuticals and auto parts. Modi's administration has taken a number of steps to win over Trump by lowering tariffs on high-end bikes, bourbon and dropping a tax on digital services that affected U.S. tech giants. Before the reciprocal announcement, the U.S. tariff rates were among the lowest, with simple average tariffs at 3.3%, compared with India's 17%, the White House said. Nigel Green, CEO of global financial advisory deVere Group, said the U.S. duties risked pushing India closer to alternative trade blocs and strategic partners. "(This) makes Indian exports immediately less competitive ... it dents investor confidence just as India is trying to attract global capital fleeing China," he said. Ajay Sahai, director general at the Federation of India Export Organisations, said the reciprocal tariff on India was lower than key competitors like Vietnam and Bangladesh, which could help Indian apparel and footwear sectors. Sign in to access your portfolio
Reuters
03-04-2025
- Business
- Reuters
US slaps 26% tariff on India amid ongoing bilateral trade talks
NEW DELHI, April 3 (Reuters) - The U.S. slapped a 26% reciprocal tariff on India in a setback to the South Asian country's expectation of getting relief from President Donald Trump's global trade policy that has unnerved world markets for weeks. The reciprocal tariff will be effective from April 9, according to a statement from the White House. here. Trump's Wednesday announcement on India was part of his wider plan to impose a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries including 34% on China and 46% on Vietnam. "They (India) are charging us 52% and we charge almost nothing for years and years and decades," Trump said at the White House while announcing the reciprocal tax. The duty of 26% was based on tariff and non-tariff barriers including currency manipulation, the Trump administration said. India imposed "uniquely burdensome" non-tariff barriers, the removal of which will increase U.S. exports by at least $5.3 billion annually, the White House said in a statement. The tariffs would remain in effect until Trump determined that the "threat posed by the trade deficit and underlying non-reciprocal treatment is satisfied, resolved, or mitigated," the statement added. The U.S. has a trade deficit of $46 billion with India. The reciprocal tariff will add pressure on Indian Prime Minister Narendra Modi, who counts himself among Trump's friends, to find ways to get India off the hook. Last week Reuters reported that New Delhi is open to cutting tariffs on U.S. imports worth $23 billion to mitigate the impact on its exports in sectors like gems and jewellery, pharmaceuticals and auto parts. Modi's administration has taken a number of steps to win over Trump by lowering tariffs on high-end bikes, bourbon and dropping a tax on digital services that affected U.S. tech giants. Before the reciprocal announcement, the U.S. tariff rates were among the lowest, with simple average tariffs at 3.3%, compared with India's 17%, the White House said. Nigel Green, CEO of global financial advisory deVere Group, said the U.S. duties risked pushing India closer to alternative trade blocs and strategic partners. "(This) makes Indian exports immediately less competitive ... it dents investor confidence just as India is trying to attract global capital fleeing China," he said. Ajay Sahai, director general at the Federation of India Export Organisations, said the reciprocal tariff on India was lower than key competitors like Vietnam and Bangladesh, which could help Indian apparel and footwear sectors.
Zawya
14-02-2025
- Business
- Zawya
Indian industries see opportunity in Trump's trade goals
Indian industry and trade experts see an opportunity to expand business with the U.S. after Prime Minister Narendra Modi met President Donald Trump, despite uncertainties over reciprocal tariffs and thanks to steps taken in the past few years. India and the U.S. agreed on Thursday to resume talks to clinch a trade deal later this year, a proposal that did not bear fruit during Trump's first term, with a goal of more than doubling bilateral trade to $500 billion this decade. India has promised to buy more U.S. defence, energy and other products. New Delhi has in the past largely dithered on trade deals fearing an onslaught of imports that could hurt domestic producers, but Indian companies are much more competitive now, partly due to government incentives like corporate tax cuts and manufacturers' own initiatives to step up quality and widen their global distribution network, industry leaders said. "Absolutely, to resume talks to clinch a trade deal later this year," said Ajay Sahai, director general at the Federation of India Export Organisations (FIEO), representing more than 37,000 exporters. "The economy has become more competitive in last four years." India's manufacturers in areas including auto components, garments, electronics and jewellery have moved to high-quality products and expanded distribution in North America, as U.S. companies looked at alternatives to China in the past few years, he said. In the past few years, the government has rolled out billions of dollars in corporate tax cuts and other incentives for domestic manufacturers to enhance their competitiveness. It has also invested in roads and ports, bringing down costs for companies. "Our exports to the U.S. would definitely go up if there is a bilateral deal as we have invested in new products, technologies and tied with buyers," said Pankaj Chadha, chairman of Engineering Export Promotion Council, and an exporter of engineering goods worth $20 million a year to the U.S. MODI'S MOVES Indian manufacturers especially in labour-intensive areas such as textiles, footwear, engineering goods, solar panels, and electronics could particularly benefit from a trade deal, Sahai said, as they do not directly compete with the U.S. India's goods and services trade with the U.S., the country's largest trading partner, jumped more than a third in five years through 2023 to $190 billion, with a surplus of $50 billion in favour of India. India's goods exports to the U.S was $73.8 billion in 2024, including medicines, telecom instruments, jewellery, petroleum products, garments, and engineering goods. Ajay Srivastava, founder of New Delhi think tank Global Trade Research Initiative, said that for nearly 75% of U.S. exports to India, like petroleum products and chemicals, average tariffs are already below 5%, so a trade deal that could scrap duties is unlikely to be a major concern. Indian government officials, however, are waiting for the return of Modi to consult local industry leaders to address their concerns in any trade deal, a government adviser said on the condition of anonymity. Analysts said after India's tariff cuts on various items such as high-end bikes in the annual budget this month, it could go for further reductions, excluding in the politically sensitive agricultural sector, to boost bilateral trade. "PM Modi may be able to wangle some exceptions/favourable deals, but that would likely entail lowering import duties for some products, as well as higher Indian purchases of U.S. goods, with defence and energy being prime sectors," said Madhavi Arora, chief economist at brokerage Emkay Global.
Reuters
14-02-2025
- Business
- Reuters
Indian industries see opportunity in Trump's trade goals
NEW DELHI, Feb 14 (Reuters) - Indian industry and trade experts see an opportunity to expand business with the U.S. after Prime Minister Narendra Modi met President Donald Trump, despite uncertainties over reciprocal tariffs and thanks to steps taken in the past few years. India and the U.S. agreed on Thursday to resume talks to clinch a trade deal later this year, a proposal that did not bear fruit during Trump's first term, with a goal of more than doubling bilateral trade to $500 billion this decade. India has promised to buy more U.S. defence, energy and other products. New Delhi has in the past largely dithered on trade deals fearing an onslaught of imports that could hurt domestic producers, but Indian companies are much more competitive now, partly due to government incentives like corporate tax cuts and manufacturers' own initiatives to step up quality and widen their global distribution network, industry leaders said. "Absolutely, to resume talks to clinch a trade deal later this year," said Ajay Sahai, director general at the Federation of India Export Organisations (FIEO), representing more than 37,000 exporters. "The economy has become more competitive in last four years." India's manufacturers in areas including auto components, garments, electronics and jewellery have moved to high-quality products and expanded distribution in North America, as U.S. companies looked at alternatives to China in the past few years, he said. In the past few years, the government has rolled out billions of dollars in corporate tax cuts and other incentives for domestic manufacturers to enhance their competitiveness. It has also invested in roads and ports, bringing down costs for companies. "Our exports to the U.S. would definitely go up if there is a bilateral deal as we have invested in new products, technologies and tied with buyers," said Pankaj Chadha, chairman of Engineering Export Promotion Council, and an exporter of engineering goods worth $20 million a year to the U.S. MODI'S MOVES Indian manufacturers especially in labour-intensive areas such as textiles, footwear, engineering goods, solar panels, and electronics could particularly benefit from a trade deal, Sahai said, as they do not directly compete with the U.S. India's goods and services trade with the U.S., the country's largest trading partner, jumped more than a third in five years through 2023 to $190 billion, with a surplus of $50 billion in favour of India. India's goods exports to the U.S was $73.8 billion in 2024, including medicines, telecom instruments, jewellery, petroleum products, garments, and engineering goods. Ajay Srivastava, founder of New Delhi think tank Global Trade Research Initiative, said that for nearly 75% of U.S. exports to India, like petroleum products and chemicals, average tariffs are already below 5%, so a trade deal that could scrap duties is unlikely to be a major concern. Indian government officials, however, are waiting for the return of Modi to consult local industry leaders to address their concerns in any trade deal, a government adviser said on the condition of anonymity. Analysts said after India's tariff cuts on various items such as high-end bikes in the annual budget this month, it could go for further reductions, excluding in the politically sensitive agricultural sector, to boost bilateral trade. "PM Modi may be able to wangle some exceptions/favourable deals, but that would likely entail lowering import duties for some products, as well as higher Indian purchases of U.S. goods, with defence and energy being prime sectors," said Madhavi Arora, chief economist at brokerage Emkay Global. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.
