US President Donald Trump has announced the imposition of reciprocal tariffs, aiming to address long-standing trade imbalances where other countries impose higher tariffs on American goods. This move is expected to affect multiple countries, including India, as the US seeks to create a more balanced trade environment.

Why is India Affected by Trump’s Tariff Policy?

• India imposes higher tariffs on US goods compared to what the US imposes on Indian goods.
• The average tariff rate on US exports to India is 9.5%, while the US only charges a 3% tariff on Indian exports.
• Trump has criticized India’s trade policies, stating that doing business in India is difficult due to high tariffs.

Which Indian Sectors Will Be Affected?

Trump’s reciprocal tariff plan is expected to impact several key industries in India, including:

✔ Food Products & Agriculture – Higher tariffs may affect India’s export of processed foods, vegetables, and spices.
✔ Textile & Clothing – India is a major exporter of textiles and garments to the US, which could face higher duties.
✔ Electrical Machinery & Auto Industry – Products like electronic goods, auto parts, and machinery may become more expensive for American consumers.
✔ Gems & Jewelry – India’s jewelry and precious stones sector is likely to face higher US tariffs.
✔ Pharmaceuticals – Although India is a key pharma supplier to the US, tariffs could affect drug exports.
✔ Iron & Steel – The metals sector may see an increase in costs, impacting trade volumes.

India’s Strategy to Reduce Trade Tensions

To minimize the impact of US tariffs, India is considering:

• Reducing tariffs on 30 products to improve trade relations.
• Increasing imports of defense and energy products from the US to balance trade deficits.
• Negotiating trade adjustments to ensure that key sectors remain competitive.

Tariffs to Be Implemented from April 2025

• Trump's reciprocal tariffs will take effect from April, targeting India, Japan, and the European Union the most.
• This marks a major shift in US trade policy, with far-reaching consequences for global trade relations.