US lowers tariff on India to 26% a day after announcing 27% rate

New Delhi: A day after the United States announced reciprocal tariffs for 50-odd countries including 27% for India, a White House document Friday showed the tariff on India was revised down to 26%. Revisions have been made for at least 14 countries, including South Korea, Norway, South Africa and Thailand.

As per a White House document, India's reciprocal tariff was originally listed at 27%, as against the 26% that US President Donald Trump had shown during the announcement on April 2.

However, the latest annex document showed that the tariffs have been revised down to 26% even as Trump Thursday said that tariffs on pharmaceuticals and semiconductors will be announced shortly.


"Any tariffs on pharmaceutical exports will be a huge setback," said Ajay Sahai, director general, Federation of Indian Export Organisations. For pharmaceuticals, copper, semiconductors, lumber articles, certain critical minerals, as well as energy and energy products, which were out of the reciprocal tariffs, officials had said that India may not be at a disadvantage. India's pharma exports to the US in FY24 were $8 billion. Mineral fuels and lubricants comprise 7.8% of the total US imports from all countries and the category is among the top five imports for the country. "The rest are a mixed bag for India," said an official on the 27% tariffs.

Jefferies had described the 27% tariff as "reasonable" from a relative perspective, but warned that a weakening US economy could hurt demand for Indian exports, especially in IT services.

Brokerage UBS said while there's a 50% chance that the tariffs might be reduced by the end of the year, the short-term impact would likely slow down the US economy, bringing 2025 growth down to around 1%. If the tariffs remain or escalate further, UBS predicted a potential US recession.

As per brokerages, the situation continues to evolve, with the global economic community closely watching how the US, India and other major economies respond in the coming weeks. The US' trading partners will be subject to a global 10% tariff on April 5, after which only the countries listed in the annex would have their rates elevated to the revised numbers. Around 60 countries have been slapped with reciprocal tariffs.