Trump Imposes 26% Reciprocal Tariff on India; What's India's Response?
On Liberation Day (April 2, 2025), US President Donald Trump unleashed a wave of tariffs on several countries worldwide. Among them, India will face a 26% tariff, as announced on Wednesday (US time). This decision has sparked discussions in India about its potential impact. However, experts suggest that this isn’t necessarily a setback for the country.
What Does This Mean for India?
India’s Ministry of Commerce is currently analyzing the implications of these reciprocal tariffs. However, there is a way forward—if a country addresses U.S. concerns, the Trump administration has provisions to reconsider and reduce tariffs. A senior official from India’s Ministry of Commerce noted that while this move has mixed consequences, it does not constitute a major blow to India.
When Will the Tariffs Take Effect?
Trump made the official announcement at 4 PM (U.S. time) on Wednesday, which was 1:30 AM IST (Thursday) in India. He stated that the tariffs would take effect immediately. However, sources in India’s Commerce Ministry clarified the timeline:
10% tariff to be enforced from April 5
Remaining 16% tariff to take effect from April 10
Key Highlights of Trump's Announcement
Trump emphasized that all countries are welcome to sell their products in the U.S. market, but they must pay a minimum tariff of 10%. For nations that impose high tariffs on American goods, the U.S. will retaliate by imposing half of what those countries charge on U.S. exports.
For example, India imposes a 52% tariff on U.S. products, so the U.S. is now imposing a 26% tariff on Indian imports in response.
Trump Mentions Indian Prime Minister Modi
During his speech, Trump made a special mention of Indian Prime Minister Narendra Modi, calling him “a great friend” but also expressing dissatisfaction with India's trade policies. He stated that India is not dealing with the U.S. fairly when it comes to tariffs.
Why Is Trump Imposing These Tariffs?
Historically, the U.S. had low tariffs on Indian imports, such as:
2.5% on foreign automobiles
2.4% on imported motorcycles
Trump argues that India’s 52% tariff on US goods is excessive, leading to his decision to impose a 26% reciprocal tariff.
What’s Next?
The Indian government is closely monitoring the situation. Meanwhile, Finance Minister Nirmala Sitharaman is expected to make a statement addressing the issue soon.
Trump's tariff policies have sent shockwaves through global trade, and while India may face challenges, officials remain optimistic about potential negotiations to mitigate the impact.