India Responds to 26% Reciprocal Tariff from the US: Impact Assessment Underway. Trump’s Reduced Tariff Opens Door for Dialogue. Negotiations to Continue.
Trump Tariff: US President Donald Trump announced hefty tariffs on several countries on April 2nd, causing ripples in the global trade world. India and China, among others, were placed under a discounted reciprocal tariff structure. India’s response to this decision has been revealed.
India’s Response: Government’s Stance on the 26% Tariff?
A senior Indian government official stated that the impact of the 26% reciprocal tariff imposed by the US on India is being assessed. The Ministry of Commerce is reviewing the situation and attempting to understand its potential consequences.
The official further explained that a universal 10% tariff on all imports into the US will come into effect from April 5th, with an additional 16% tariff taking effect from April 10th. The ministry will conduct a thorough review of these tariffs to determine their implications for India.
Scope for Continued Dialogue with the US?
According to government sources, the tariff structure includes a provision where the Trump administration may consider lowering the tariff rate if a country voices its concerns to the US.
Trump imposed a 26% tariff on India instead of the initially anticipated 52%, which is being described as a concession. This clearly signals that the US does not wish to close the door on dialogue with India. Both countries maintain ongoing communication on this issue.
Why Isn’t This Tariff a Major Blow for India?
India is already engaged in negotiations with the US on a Bilateral Trade Agreement. Both countries aim to finalize the first phase of this agreement by September-October 2025.
The official stated that this tariff is not a major setback for India, and its impact may be mixed. The Indian government is cautiously monitoring the situation and formulating an appropriate strategy.
Trump’s Statement: Reasons for Imposing Tariffs on India?
In his statement, Trump mentioned that Indian Prime Minister Narendra Modi recently visited the US and that they are good friends. However, during that visit, Trump told Modi, "India always collects a 52% tariff from the US, which is not right. Therefore, we will impose only half, or 26%, tariff on India."
‘Liberation Day’ Declared for the US
During a media interaction in the White House Rose Garden on April 2nd, Trump termed the day as ‘Liberation Day’ for the US. He stated that this day will be remembered as the rebirth of American industry and a significant step towards strengthening the nation's economy.
