While US tariffs on Indian goods have remained relatively stable over the years, India’s tariff policies have been more dynamic.
The impact of the United States’ tariff reciprocity on Indian exports is expected to be minimal, according to a report by the State Bank of India. The report, prepared by SBI’s Economic Research Department, estimated that the additional tariffs — ranging from 15 to 20 per cent — would limit the overall decline in Indian exports to the US by only 3 to 3.5 per cent.
It said, “Our estimates show overall incremental tariff levels even at 15-20 per cent imposed by the USA would still limit the impact on exports to the US only in the range of 3-3.5 per cent which again should be negated through higher export goals”.
As per the report, the experts believe that this impact can be offset by India’s strategic export diversification, increased value addition, and exploration of new trade routes.
“While there is a lot of white noise and froth in the broader markets regarding the extent of the impact of the tariff on India under proposed ‘Fair & Reciprocal Plan’ that seeks to correct (from US perspectives) longstanding imbalances in international trade and ensure fairness across the board, we understand the overall bilateral negotiations provide a collateral benefit to India,” reads the report.
The US remains India’s top export destination, accounting for 17.7 per cent of total exports in the financial year 2023-24. However, India’s export strategy is evolving to reduce its dependence on any single market.
With growing trade ties in Europe, the Middle East, and other regions, India is working on strengthening its supply chain networks to ensure stability in exports.
While US tariffs on Indian goods have remained relatively stable over the years, India’s tariff policies have been more dynamic.
The report highlighted that the US tariff rate on Indian goods increased from 2.72 per cent in 2018 to 3.91 per cent in 2021 before slightly decreasing to 3.83 per cent in 2022. On the other hand, India’s tariffs on U.S. imports have risen more significantly, from 11.59 per cent in 2018 to 15.30 per cent in 2022.
With ANI inputs
