India’s apex exporters’ body, FIEO, stated on Thursday that the 26 per cent tariffs or import duties announced by US President Donald Trump on India will undoubtedly affect domestic players.
However, India is much better placed than many other countries, said Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO).
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He expressed hope that the proposed bilateral trade agreement (BTA), currently being negotiated between the two countries, 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,” Sahai told PTI.
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The US President highlighted the high tariffs charged by India on American products as he announced reciprocal tariffs on countries worldwide, declaring a 26 per cent “discounted reciprocal tariff” on India.
As he made the announcement, he held up a chart that showed the tariffs that countries like India, China, the UK, and the European Union charge, along with the reciprocal tariffs these countries will now have to pay.
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The chart indicated that India imposed 56 per cent tariffs, “including currency manipulation and trade barriers,” and that America would now charge India a “discounted reciprocal tariff” of 26 per cent.
“India, very, very tough. Very, very tough. The Prime Minister just left. He’s 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…,” Trump said.
From 2021-22 to 2023-24, the US was India’s largest trading partner. The US accounts for about 18 per cent of India’s total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.
With America, India has a trade surplus (the difference between imports and exports) of USD 35.32 billion in goods in 2023-24. This was USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22, USD 22.73 billion in 2020-21, and USD 17.26 billion in 2019-20.
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In 2024, India’s main exports to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), gold and other precious metal jewellery (USD 3.2 billion), ready-made garments of cotton, including accessories (USD 2.8 billion), and products of iron and steel (USD 2.7 billion).
Imports included crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal, coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), aircraft, spacecraft and parts (USD 1.3 billion), and gold (USD 1.3 billion).
