The imposition of reciprocal tariffs on India could significantly affect exports. If the United States raises tariffs on Indian goods, it is likely to result in a decline in trade volume. India conducts over 17% of its foreign trade with the U.S., making it a crucial market.
Additionally, the U.S. is the largest importer of India's agricultural products, including fruits and vegetables, meaning that increased tariffs could adversely impact these sectors.
Indian products will become costlier in America
In 2024, America has also imported 18 million tonnes of rice from India. If America imposes tariff on India, Indian products will become costlier in American markets. This will reduce their demand among the American public.
India's average tariff rate declined to 11.66% by 2024
India has historically been one of the countries with the highest tariff rates. The average tariff in India reached as high as 125% until the fiscal year 1990-91. Following economic liberalization, these rates began to decline. By 2024, India's average tariff rate had decreased to 11.66%.
Average tariff rate in 2025 has come down to 10.65%
After Trump became President again, the Indian government changed the tariff rate. The Indian government has abolished tariff rates of 150%, 125% and 100%. Now the highest tariff rate in India is 70%. There was a 125% tariff on luxury cars in India, now it has been reduced to 70%. In such a situation, India's average tariff rate in the year 2025 has come down to 10.65%.
Usually all countries impose tariffs. Its rate can be low in some countries and high in others. However, compared to other countries, India is one of the countries imposing the highest tariffs.
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