Trump announces 27% tariffs on imports from India in 'kind reciprocal' move

US President Donald Trump on Thursday (IST) announced reciprocal tariffs on all imports from India and other nations, calling the move “kind reciprocal." Calling India’s tariffs “very, very tough," Trump said he was imposing 27 per cent tariffs on all imports from India — half of what India imposes on US products.

In his address titled 'Make America Wealthy Again' at the White House, Trump recalled Prime Minister Narendra Modi’s recent visit to the US. “He (PM Modi) is a great friend of mine. But I said, ‘You’re a friend of mine, but you're not treating us right.’ They charge us 52 per cent but we charged them almost nothing for years and decades. And it was only seven years ago when I came in,” he said.

Overall, Trump announced universal tariffs of at least 10 per cent on practically all imports, with higher rates on countries that have the highest trade deficits with the US. He also said the US would impose a 25 per cent tariff on all foreign-made automobiles to address “horrendous imbalances” that have impacted the US industrial base.

"Taxpayers have been ripped off for more than 50 years," Trump said in remarks at the White House. "But it is not going to happen anymore."

The tariffs will come into effect immediately following Trump’s announcement, as stated by the White House earlier.

India closely monitoring Trump announcements

According to news agency PTI, the Indian government set up a control room to monitor Trump’s announcements regarding the imposition of reciprocal tariffs. Senior officials from ministries including commerce and industry are closely tracking the developments.

Prior to the announcement of tariffs, India had been engaged in diplomatic efforts to seek an exemption. Last month, Commerce and Industry Minister Piyush Goyal travelled to Washington DC to initiate discussions on a bilateral trade agreement between India and the US. The visit aimed to address the impending tariff announcement and explore avenues for enhancing economic cooperation between the two nations.

On March 31, the Office of the United States Trade Representative released a report detailing how foreign nations impose tariffs on the US. The report stated that India’s tariff and non-tariff policies remain among the most restrictive in major global economies. It further stated that India continues to impose steep tariffs and a range of regulatory barriers on imports from the US, particularly in sectors such as agriculture, pharmaceuticals, medical devices, and digital services.

Ahead of the tariff announcement, India had already implemented several strategic measures aimed at addressing US trade concerns. In the Union Budget on February 1, the government reduced basic customs duties on various items, including luxury cars, solar cells, and machinery — lowering the peak import tariff from 150 per cent to 70 per cent, and bringing average tariffs down from 13 per cent to below 11 per cent.

According to a Reuters report, India also proposed tariff reductions on US agricultural products such as almonds, cranberries, and bourbon whiskey. In addition, reports suggest that India is considering cutting tariffs on liquefied natural gas (LNG) imports from the US.

'Trump tariffs will undoubtedly affect domestic players': FIEO

Reacting to Trump's announcement, the Federation of Indian Export Organisations (FIEO), India's apex exporters' body, said the 27 per cent import duty will "undoubtedly affect domestic players."

However, Ajay Sahai, Director General and CEO of FIEO, stated that India is much better placed than many other countries. He expressed hope that the proposed bilateral trade agreement would be concluded at the earliest as it would provide relief from these reciprocal tariffs.

"We have to assess the impact, but looking at the reciprocal tariffs imposed on other countries, we are in a lower band. We are much better placed compared to our key competitors such as Vietnam, China, Indonesia, Myanmar, etc. We will definitely be affected by the tariffs, but we are much better placed than many others," news agency PTI quoted Sahai as saying.