Sources said New Delhi, April 1 (PTI) The Ministry of Commerce is working on various scenarios, which is working on its leading trading partners including India to assess the possible decline of mutual tariffs implemented by the US administration on its leading business partners of the US.
US President Donald Trump has said that April 2 will be ‘liberation day’ as it is planning to declare tariffs or import duties to reduce America’s trade deficit and promote the construction of the country.
India and the US are also working on a bilateral trade agreement to promote two-way commerce and investment.
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Domestic industry and exporters have expressed concern over the possible impact of America’s mutual tariffs on India’s exports as duties can make goods unpredictable in global markets. America is the largest trading partner in India.
Responding to questions at the Oval office on Monday, Trump said that India will “leave its tariff to a great extent”.
“I have heard that India, a while ago, is going to leave its tariff to a great extent. I said, no one did this long ago. Many countries are going to leave their tariffs … If you see the European Union on cars, the European Union had already announced 2.5 percent.
Just hours before Trump’s comments, the White House said that India imposes 100 percent tariffs on US agricultural products.
Sources in New Delhi said on Tuesday that the influence of the American tariff may vary from the sector to the region and the ministry is preparing for various scenarios.
These landscapes will be important to help domestic companies deal with these duties as it is still uncertain about quantum and the way the US is planning to impose tariffs.
According to the US Trade Representative (USTR) National Trade Estimate (NTE) Report 2025, India maintains “high” import duties on a wide range of US goods such as agricultural commodities, drugs, drugs, and alcoholic beverages, in addition to implementing non-fee obstacles.
Indian industry and government officials are uncertain about the amount of these duties.
It is still not clear how tariffs will be applied – whether the product level, sector level, or at the country level, another source said.
Currently, American goods face a weighted average tariff of 7.7 percent in India, while Indian exports to the US attract only 2.8 percent, leading to a difference of 4.9 percent. Currently, Indian agricultural exports to the US are facing 5.3 percent of the duty, while US agricultural exports in India face 37.7 percent more, which creates a difference of 32.4 percent.
Business experts stated that at the level of a broad field, potential tariff gaps between India and the US differ throughout the regions.
The difference for chemicals and pharmaceuticals is 8.6 percent, 5.6 percent for plastics, 1.4 percent for textiles and clothing, 13.3 percent for diamonds, gold, and 2.5 percent for jewelery, iron, steel and base metals, 2.5 percent for machinery and computer, 7.3 percent for computer and 7.2 percent for automobies.
The higher the tariff difference, the more affected one sector will be affected, the founder of Think Tank GTRI Ajay Srivastava has said.
India’s exports to the US are facing each different tariff effects in 30 regions, six in agriculture and 24 in industry.
Experts have stated that Agri sectors that may be more affected due to the implementation of mutual tariffs include fish, meat, processed seafood, shrimp, sugar, cocoa, rice, spices, dairy products, edible oils, wine and souls.
Similarly, industrial items that can attract and affect these duties include pharmaceutical fields, diamonds, electrical and telecom equipment, machinery, boilers, turbines, computers, some chemicals, textiles, clothes, yarn, carpets, tires and footwear.
In addition, sources said that Indian companies have also marked some non-tariff barriers that they face in the US.
Obstacles include the export of wild caught shrimp from India on the basis that did not use excluded devices of Indian tralers turtle to turtle; Private standard of American companies; And high registration costs for areas like Pharma.
The Ministry of Commerce is developing a portal to register the non-tariff barriers (NTBs) faced by exporters and to take them to their resolve with the respective countries.
“The portal is currently working on beta mode. It may take about two months for formal launch. One of the sections of the stage will also be opened to the public,” said one of the sources.
Cases where the obstacle is affecting large amounts of goods, priority will be given for their prevention.
From 2021–22 to 2023-24, America was India’s largest trading partner. The US accounts for about 18 percent of India’s total goods exports, 6.22 percent in imports and 10.73 percent in bilateral trade.
Along with India, the US has a trade surplus of USD 35.32 billion (difference between imports and exports) in the US in 2023–24. 27.7 billion USD in 2022-23, 32.85 billion in 2021-22, USD 22.73 billion in 2020-21 and $ 17.26 billion in 2019-20. PTI RR CS HVA
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