US reciprocal tariffs unlikely to significantly impact India: GTRI

The United States' decision to impose reciprocal tariffs is unlikely to impact India significantly due to differences in their export profiles, according to the Global Trade Research Initiative (GTRI). India does not export many products that could be affected by these tariffs, and 75% of US exports to India already face an average tariff of less than 5%,according to information.
India, however, continues to encounter high US tariffs on labor-intensive exports like textiles, garments, and footwear, which range from 15% to 35%. GTRI suggests India may wait until April before formulating a response to the US decision on reciprocal tariffs, similar to its approach in June 2019. The proposed trade deal remains unclear but is expected to focus on tariff adjustments rather than broader trade agreements.
The US has already imposed 25% non-reciprocal tariffs on steel and aluminum, according to sources. GTRI notes that this is not an ideal time for an FTA, as past agreements like the USMCA have been undermined by unilateral US tariff actions. A White House report highlights tariff disparities, such as India’s 100% tariff on US motorcycles versus the US's 2.4% on Indian motorcycles, raising concerns over transparency in the US’s tariff application.
The US remains a key trading partner for India. From April to November 2024-25, bilateral trade amounted to $82.52 billion, with India maintaining a trade surplus, according to information. In 2023-24, trade reached $119.71 billion, reinforcing India's strong export position. Despite potential reciprocal tariffs, the structural differences in trade patterns between the two nations suggest minimal overall disruption, though India will closely monitor US actions before responding.

(Business Correspondent)