As President Donald Trump announced Wednesday that he will impose a new 10% tariff on all imported goods along with higher import taxes tailored for each of about 60 bad actors, India got a “friendship” discount.
Even as he described Prime Minister Narendra Modi as a “great friend,” he called out India over high import duties as he announced a 27% “discounted” and “kind” reciprocal tariff on the country.
“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%. You have to understand, we charge them almost nothing, for years and years and decades,” he said announcing the tariffs at a White House ceremony in the Rose Garden.
READ: India among top 10 countries to be hit by Trump’s tariffs on aluminum, steel (February 11, 2025)
To impose the new tariffs, the president declared a national emergency, citing the annual merchandise trade deficit that the United States has run each year since 1975.
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said. “But it is not going to happen anymore.”
A baseline 10% baseline tariff starts on Saturday before the remaining, higher reciprocal tariff takes effect from April 9.
India’s trade ministry said it’s “carefully examining the implications” of the U.S. announcement and also holding talks with Indian industry and exporters on their assessment of the tariffs.
“The department is also studying the opportunities that may arise due to this new development in U.S. trade policy,” it said, and referred to the agreement between Trump and Modi in February to work on the first phase of a trade deal by autumn 2025.
“The ongoing talks are focused on enabling both nations to grow trade, investments and technology transfers,” it said, referring to negotiations between the two sides. “We remain in touch with the Trump administration on these issues and expect to take them forward in the coming days.”
From 2021-22 to 2023-24, the United States was the largest trading partner of India. It accounts for about 18% of India’s total goods exports.
The tariff increases target key trading partners, including China (34%), India (27%), the European Union (20%), South Korea (25%), Japan (24%), and Taiwan (32%). Trump justified the action as a necessary correction to long-standing trade imbalances that he claims have weakened the US economy.
A White House statement outlined disparities in existing tariff structures between the U.S. and its trade partners noting that India imposes a 70% tariff on imported passenger vehicles, while the U.S. levies only 2.5%.
READ: Trump threatens to impose tariffs on countries that may ‘harm’ America, includes India (January 28, 2025)
Similarly, while U.S. apples enter India with a 50% duty, Indian apples face zero tariffs in the U.S. Other discrepancies include networking switches and routers, which India taxes at 10-20%, while the U.S. imposes no tariffs. Rice imports into India attract an 80% duty, compared to just 2.7% in the U.S.
The methodology behind these reciprocal tariffs stems from a calculation designed to offset bilateral trade deficits. According to a statement from the United States Trade Representative (USTR), these tariffs are set at rates necessary to drive trade deficits to zero.
USTR argued that persistent U.S. trade deficits—spanning five decades—prove that standard economic models assuming automatic trade balance corrections are flawed.