India’s Response to US Reciprocal Tariffs
The Ministry of Commerce and Industry is actively analyzing the impact of US President Donald Trump’s newly announced reciprocal tariffs on Indian exports. The government is engaging with key stakeholders, including industry leaders and exporters, to assess challenges and potential gains arising from the policy shift in Washington.
India will face a baseline duty of 10% starting April 5, while an additional country-specific ad-valorem levy of 27% will come into effect on April 9, according to Annex I of the Executive Order issued by the White House. However, discrepancies between the official tariff chart and Trump’s media presentation have raised questions regarding the exact rate applicable to Indian goods, with some sources citing a 26% tariff.
The ministry is examining sectors where India could gain a competitive advantage, particularly in industries where China and Vietnam—facing higher tariff rates—have traditionally dominated.
The government is consulting industry leaders to evaluate the impact of new US tariffs.
India’s tariff rate will be 10% from April 5, with an additional 27% levy from April 9.
Official documents and Trump’s announcement show inconsistencies regarding India’s final tariff rate.
Bilateral Trade Agreement Talks Gain Momentum
Amidst the tariff upheaval, Indian and US trade teams are intensifying discussions on a Bilateral Trade Agreement (BTA) aimed at reducing trade frictions and enhancing cooperation in multiple sectors. The ongoing negotiations are part of a broader effort under the “Mission 500” initiative, which aims to more than double India-US bilateral trade in goods and services to $500 billion by 2030.
Both nations are working toward finalizing the first phase of the BTA by the fall of this year, with discussions focusing on supply chain integration, investment facilitation, and technology transfers. India’s trade officials have emphasized the need for a structured framework to address tariff-related challenges while fostering long-term economic collaboration.
India and the US are negotiating a multi-sectoral Bilateral Trade Agreement.
“Mission 500” aims to increase bilateral trade to $500 billion by 2030.
The first tranche of the agreement is expected to be finalized by fall 2025.
Trade Figures and Strategic Importance
India remains a crucial trading partner for the US, ranking as the tenth-largest exporter to the American market. In 2024, India’s exports to the US stood at $91 billion, making the North American nation India’s top export destination. Bilateral trade in goods and services reached $190.08 billion in 2023, underscoring the deep economic ties between the two countries.
Despite the tariff challenges, Indian officials maintain that the India-US Comprehensive Global Strategic Partnership will continue to evolve, particularly under initiatives such as “Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology” (COMPACT). The focus remains on ensuring that trade remains a pillar of mutual growth and technological advancement.
India ranked tenth among US trading partners, with $91 billion in exports in 2024.
Bilateral trade reached $190.08 billion in 2023.
India and the US are advancing trade and technology cooperation under the COMPACT framework.
