The development comes as India and the US are already engaged in negotiations aimed at finalising the first phase of a bilateral trade agreement by fall (September-October) this year. Despite the recent tariff announcement, the official described the situation as a "mixed bag" rather than a setback for India, emphasising that ongoing talks could still lead to positive outcomes.
Trum imposes reciprocal tariff on India
The US President listed the high tariffs charged by India on American products as he announced reciprocal tariffs on countries across the board, declaring a 26 per cent "discounted" reciprocal tariff on India. "This is Liberation Day, a long-awaited moment. 2nd April 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again. We are going to make it wealthy, good, and wealthy," Trump said on Wednesday in remarks from the Rose Garden at the White House as he announced the closely watched reciprocal tariffs on countries that impose levies on American goods.
As he announced the tariffs, he held up a chart that showed the tariffs that countries such as India, China, the UK, and the European Union charge, along with the reciprocal tariffs that these countries will now have to pay. The chart indicated that India charged 52 per cent tariffs, including currency manipulation and trade barriers, and America would now charge India a discounted reciprocal tariff of 26 per cent.
What is reciprocal tariff?
A reciprocal tariff is a duty imposed by one country in response to the tariffs levied by another country on its exports. Essentially, it operates on a tit-for-tat basis where a nation attempts to counterbalance the economic impact of high tariffs imposed on its goods by charging a similar or proportional rate in return. Trump’s "discounted reciprocal tariff" is aimed at offsetting the tariffs that India allegedly imposes on American products. The US President emphasised that this new measure was a necessary step to protect American interests and promote fair trade.
(With inputs from PTI)
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