Consider this: India’s simple average is less than 16%; however, New Delhi’s weighted average applied tariff rate is just 4.6%.
The gap indicates that higher tariffs are concentrated in a few low-import sectors, such as agriculture and automobiles, which account for a small share of trade between India and the United States.India’s trade-weighted average rate of 4.6% is lower than the European Union’s 5%. Developing economies like Vietnam and Indonesia are also well above India’s rate. The rate for Bangladesh is over 10%.
Since January this year, India has made several concessions to strike a deal with the United States. Harley Davidson motorcycles in India are now cheaper after duties were reduced from the earlier 50% to around 30%.
Similarly, tariffs on bourbon whiskey have been cut from 150% to 100%. These were two of the many tariff measures India undertook to sweeten the deal.
That’s not all; India abolished a 6% equalisation levy, which was applicable on US tech firms offering online services in India. Additionally, retaliatory tariffs on key American agricultural exports like apples, walnuts, and almonds were withdrawn in 2023 after the resolution of WTO disputes.
India has also been increasing its energy imports from the US—in the first quarter of this financial year, US energy imports are up 114%.
The share of US crude in India’s import basket has risen from 3% to 8% in July alone. India is estimating a 150% rise in energy imports from the US this year.
Responding to the US President, the Ministry of External Affairs said the targeting of India is unjustified and unreasonable and promised to take all necessary measures to safeguard national interests and economic security.
India said it began importing from Russia because “traditional supplies” were diverted to Europe after the Ukraine war. In fact, India went on to say the US “actively encouraged” imports of the Russian oil by India as it strengthened global energy market stability. It was because of a sharp spike in oil prices with Brent crude hitting $137 per barrel in March 2022 after Russia invaded Ukraine.
In November 2022, US Treasury Secretary Janet Yellen had said, “the United States is happy for India to continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap mechanism, if it steers clear of western insurance, finance and maritime services bound by the cap.”
Just a few months ago, in May 2024, US Ambassador to India Eric Garcetti admitted that India bought Russian oil because the US wanted somebody to buy Russian oil and the US allowed the purchases to ensure oil prices do not go up globally.
(Edited by : Ajay Vaishnav)
First Published: Aug 5, 2025 9:29 PM IS
