WASHINGTON, DC – U.S. President Donald Trump on April 2 announced a sweeping 26% “reciprocal tariff” on Indian imports, citing New Delhi’s “very tough” trade policies. The move comes as part of a broader tariff strategy, with the U.S. imposing higher duties on several nations, including 34% on China and 46% on Vietnam.

Impact

The new tariffs are expected to hit Indian textiles, engineering goods, electronics, and the gems and jewelry industries the hardest, said ANI.

Ajay Bagga, an international trade expert, noted that while India’s domestic market may not see immediate effects, exporters will face rising costs and reduced competitiveness in the U.S. market. “These tariffs are based on exaggerated calculations, including alleged currency manipulation and GST,” he said, warning that Trump’s “America First” policy risks isolating the U.S. from key trade partners.

Meanwhile, India said it was assessing the impact of the new tariffs, and trade negotiations were ongoing. India is hoping to finalize a bilateral trade agreement by the Fall of this year, which could determine whether these tariffs continue to remain in place or are dismissed after the Trump administration is satisfied. Reports indicate that India is considering tariff cuts worth $23 billion so that its export sector is not badly affected.

Pharma

Despite the wide-ranging tariffs, India’s pharmaceutical sector has escaped immediate impact. The U.S. is India’s largest pharmaceutical export market, with Indian firms supplying 45% of generic drugs and 15% of biosimilars used in the country. Indian giants such as Aurobindo Pharma, Dr. Reddy’s, and Sun Pharma, which derive 30-50% of their revenues from the U.S., have been spared for now. However, in what sounded like a hint at what is yet to come, Trump said on April 2, “We’re going to produce the medicines we need right here in America.”

Friend And No Friend

Trump, who recently hosted Prime Minister Narendra Modi in Washington, reiterated his stance that India has not been “treating the U.S. right” in trade. “They charge us 52%, and we charged them almost nothing for years,” he said.

The U.S.-India trade deficit currently stands at $46 billion, with Washington pressuring New Delhi to lower its barriers. According to the White House, India’s restrictive policies cost the U.S. at least $5.3 billion in potential exports annually.

@India-West News Desk