Gearing up for Trump tariffs, India weighs multiple scenarios

India is examining multiple scenarios to assess the possible fallout of US President Donald Trump's April 2 reciprocal tariffs, officials said.

The commerce and industry ministry is working on a couple of scenarios based on tariff differentials and the levies that Trump has imposed on various countries and sectors till now to protect the domestic industry.

The ministry has also discussed with the domestic industry the various non-tariff barriers that their exports face in the US.


"The impact of these tariffs may vary across sectors and countries. An exercise is on to prepare different scenarios," said an official.

These scenarios assume significance in the wake of uncertainty around the quantum and application of these duties.

Consultancy major PWC Tuesday said that Washington may assess reciprocal tariffs based on five factors-existing tariffs on American goods, internal taxes, non-tariff barriers and regulatory burdens, foreign exchange policies and any other trade practices deemed unfair by the USTR.

Trump Monday said India will be "dropping its tariffs very substantially" as he prepares to announce reciprocal tariffs on countries on April 2, which he has termed Liberation Day.

"I think a lot of (countries) will drop their tariffs because they've been unfairly tariffing the United States for years. If you look at the European Union on cars, the EU already dropped tariff to 2.5%. It was announced a couple of days ago. A very small tariff. The United States charged very little," Trump said while responding to questions in the Oval Office on Monday.

"I think I heard that India, just a little while ago, is going to be dropping its tariffs very substantially. I said, why didn't somebody do this a long time ago. A lot of countries are going to be dropping their tariffs," Trump said.

Non-tariff barriers

Separately, the ministry is receiving feedback from Indian industry on the non-tariff barriers which they face while exporting to the US and is set to launch a portal in the next two months for registering such barriers faced by exporters.

"One of the sections of the platform will be opened for the public. Cases where the barrier is impacting a large volume of goods will be prioritised for their redressal," said another official.

The barriers include the US banning export of wild-caught shrimp from India on the grounds that Indian trawler vessels were not using Turtle Excluder Devices and private standards imposed by American companies.