Guwahati, Apr 3: India reacted cautiously on Thursday to US President Donald Trump’s sweeping tariffs, with exporters acknowledging that the flat 27% duty imposed on the world’s fifth-largest economy could have been far worse.
The US President issued an Executive Order on Reciprocal Tariffs, imposing additional ad-valorem duties ranging from 10% to 50% on imports from all trading partners. The baseline duty of 10% will take effect from April 5, 2025, while the remaining country-specific additional ad-valorem duties will be implemented from April 9, 2025. As per Annex I of the Executive Order, the additional duty on Indian exports has been set at 27%.
However, the tariffs on India exempt key sectors such as pharmaceuticals, semiconductors, lumber articles, copper and gold, energy resources, and select minerals unavailable in the US.
“India is very, very tough… The PM is a great friend, but you’re not treating us right. They charge us 52%, we charge almost nothing,” Trump said during his Liberation Day speech. He declared April 2, 2025, as a historic moment, stating, “This is LIBERATION DAY—April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day we began to make America wealthy again.”
Following the announcement, Indian stocks reacted negatively, with the benchmark Nifty index dropping nearly 0.3% in morning trading on Thursday.
India’s Department of Commerce stated that it is carefully examining the implications of the US tariff measures. “Keeping in view the vision of Viksit Bharat, the Department is engaging with all stakeholders, including Indian industry and exporters, to assess the impact and identify opportunities arising from this new US trade policy,” the statement said.
Despite the tariff setback, India and the US remain engaged in trade discussions. On February 13, 2025, Prime Minister Narendra Modi and President Trump launched ‘Mission 500’—a bilateral initiative aimed at more than doubling trade between the two nations to $500 billion by 2030. Talks for a mutually beneficial Bilateral Trade Agreement (BTA) are ongoing, covering areas such as supply chain integration, technology transfers, and investment growth.
India reaffirmed its commitment to strengthening its Comprehensive Global Strategic Partnership with the US. The two nations are actively working on the ‘Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology’ (COMPACT) framework to ensure that trade ties remain robust and transformative.
Ajay Sahai, Director General of the Federation of Indian Export Organisations, expressed concern over the impact of the new tariffs. “The tariffs slapped on India are definitely both high and higher than expected, which will hurt demand for our exports,” he said.
Congress MP Shashi Tharoor echoed these concerns, stating that the 27% tariff will affect some of India’s exports to America, making them less competitive. “The US is one of the few major economies where we have a positive trade balance. We export about $74 billion to them, with a surplus of around $45 billion in our favor. If that declines significantly, it will surely impact our economy,” he said.
Despite the challenges, trade experts believe India is in a relatively better position compared to some of its global competitors.
The new US trade policy has sent shockwaves across Europe. French government spokeswoman Sophie Primas stated, “We are ready for this trade war,” in response to the sweeping reciprocal tariffs. The European Union’s 27 member nations are facing a blanket 20% tariff, with even higher rates applied to specific sectors.
An official familiar with the Trump administration’s trade stance suggested that the US could consider lowering duties if a country addresses Washington’s concerns. India, already in negotiations for a bilateral trade deal, aims to finalize the first phase of its agreement with the US by the fall of 2025.
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