US Revises India’s Tariff Rate, Cuts It To 26% From 27%

The United States has updated its import tariffs on Indian goods, reducing the rate from the previously announced 27 per cent to 26 per cent, according to a revised White House document. These tariffs are set to take effect on April 9, 2025. ​

In a recent announcement, President Donald Trump presented a chart detailing reciprocal tariffs for various countries, including India, China, the UK, and the European Union. The chart indicated that India imposes tariffs averaging 52 per cent, encompassing aspects like currency manipulation and trade barriers. In response, the US has set a reciprocal tariff of 26 per cent for Indian imports.

This adjustment comes amid ongoing trade discussions between the two nations. India is carefully examining the implications of the new tariffs and remains committed to advancing a trade agreement with the US.

Also Read: What Is A Reciprocal Tariff? Here's How It Affects The Trade Relations Between Countries

India’s Trade Surplus

In the fiscal year 2023-24, India maintained a trade surplus of approximately $35.32 billion with the US, with exports totaling $85.5 billion. Major exports included drug formulations, telecom instruments, and precious stones. Imports from the US comprised crude oil, petroleum products, and electronic machinery. citeturn0search6

The reduction in tariffs is expected to have a minimal immediate impact, as industry experts suggest that a 1 per cent change is unlikely to significantly affect current trade dynamics. However, it underscores the complexities of international trade relations and the ongoing efforts to address trade imbalances.

In response to the new tariffs, India is considering measures such as removing import taxes on US liquefied natural gas (LNG) to increase imports and reduce the trade surplus. This strategy aims to make US LNG more competitively priced and aligns with India's commitment to enhancing energy imports from the US. citeturn0news20

Overall, while the tariff reduction may have a limited immediate effect, it highlights the dynamic nature of international trade policies and their potential impact on bilateral relations between the US and India.

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