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US slaps 26% tariff on India

Published on April 03, 2025 at 05:27 AM

The United States has slapped a 26% reciprocal tariff on India in a setback to the South Asian country's expectation of getting relief from President Donald Trump's global trade policy that has unnerved world markets for weeks.

According to a statement from the White House, the reciprocal tariff will be effective from April 9.

The announcement of the tariffs on Wednesday on India was part of Trump's wider plan to impose a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries, including 34% on China and 46% on Vietnam.

“They (India) are charging us 52% and we charge almost nothing for years and years and decades,” Trump said.

The Trump's administration said the duty of 26% was based on tariff and non-tariff barriers including currency manipulation.

The White House said in a statement that India imposed uniquely burdensome non-tariff barriers, the removal of which will increase US exports by at least $5.3 billion annually.

The statement added that the tariffs would remain in effect until Trump determined that the threat posed by the trade deficit and underlying non-reciprocal treatment is satisfied, resolved, or mitigated.

DAILY POST reports that the US has a trade deficit of $46 billion with India.

The reciprocal tariff will add pressure on Indian Prime Minister Narendra Modi, who counts himself among Trump's friends, to find ways to get India off the hook.

Last week Reuters reported that New Delhi is open to cutting tariffs on US imports worth $23 billion to mitigate the impact on its exports in sectors like gems and jewellery, pharmaceuticals and auto parts.

Modi's administration has taken a number of steps to win over Trump by lowering tariffs on high-end bikes, bourbon and dropping a tax on digital services that affected US tech giants.

According to the White House, before the reciprocal announcement, the US tariff rates were among the lowest, with simple average tariffs at 3.3%, compared with India's 17%.

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