Govt analysing impact of 27% Trump tariff on India; it's mixed bag, not setback: Official

The US’ reciprocal tariffs are a mixed bag for India and not a setback, an official said Thursday, adding that the commerce and industry is analysing the impact of the 27% tariffs announced for the country.

US president Donald Trump announced sweeping tariffs on 50-odd countries as per which a universal 10% baseline tariff would apply to all imports from April 5 and country-specific reciprocal tariffs replace the baseline tariffs from April 9.

“We are analysing the impact. It is a mixed bag. There is a provision that if a country would address the concerns of the US, the Trump administration can consider reducing the duties against that nation,” said an official.


This gives India an edge above the others as it is already in talks for a Bilateral Trade Agreement (BTA) with the US and
aim to conclude its the first tranche by Fall this year.

With the US setting a relatively lower reciprocal tariff rate of 27% on Indian goods—compared to 54% on China, 46% on Vietnam, 37% on Bangladesh, and 36% on Thailand—India gains a natural competitive advantage in the key sectors of textiles and garments, electronics, telecom, and smartphone sectors, semiconductors, machinery, automobiles, and toys.

“This is Liberation Day, a long-awaited moment,” Trump said Wednesday from the Rose Garden at the White House as he held up a chart that showed the tariffs that countries such as India, China, the UK, and the EU charge, along with the reciprocal tariffs that these countries will now have to pay.

The chart indicated that India charged 52% tariffs, including currency manipulation and trade barriers, and America would now charge India a discounted reciprocal tariff of 26%. As per the White House, the adjusted reciprocal tariff for India would be 27%.

“Net-net, it appears India's export competitiveness to the US market stands far less impacted on a relative basis. Yet our industry should make concerted efforts to increase export efficiency and value addition, to mitigate impact of these tariffs,” said Assocham President Sanjay Nayar.

Nayar said that since most of American trading partners have planned to levy reciprocal tariffs, no country gets a winning advantage while consumers may end up paying more leading to inflationary pressures.