US Trade Representative Report keeps India on ‘Priority Watch List’ over intellectual property concerns

The US Trade Representative’s (USTR) 2025 Report has once again placed India on its ‘Priority Watch List,’ citing intellectual property concerns while also flagging issues such as internet shutdowns, data localisation rules, and high tariffs. Meanwhile, New Delhi is seeking a temporary reprieve from the proposed reciprocal tariffs, set to be imposed from April 2.Highlighting the challenges faced by American workers, farmers, ranchers, and exporters due to India’s trade policies, the report lists several tariff and non-tariff barriers, stating that many of India’s actions violate its World Trade Organization (WTO) commitments.
The report describes India’s most-favoured-nation (MFN) applied tariff rate of 17% in 2023 as one of the highest among major world economies. Non-agricultural goods faced an average tariff of 13.5%, while agricultural goods were subjected to tariffs as high as 39%. Additionally, India’s WTO-bound tariffs on agricultural products remain among the highest globally, averaging 113.1%, with some reaching up to 300%.
The US has already threatened reciprocal tariffs on multiple countries starting April 2, even as both nations negotiate the first tranche of a Bilateral Trade Agreement (BTA) within 2025. As per sources, the Indian industry has also expressed concerns before the government over the possible impact of the imposition of reciprocal tariffs.The USTR report highlights India’s high tariffs on corn, vegetable oils, apples, motorcycles, flowers, natural rubber, coffee, raisins, walnuts, and alcoholic beverages. It points out that India’s customs duty on drug formulations exceeds 20%, even for medicines on the World Health Organization’s (WHO) essential medicines list. It added that India’s ability to alter tariffs unpredictably has created uncertainty for American stakeholders.

On alcoholic beverages, the report cites insufficient protections for Bourbon, Rye, and Tennessee Whiskey as distinct US products. It also flags a lack of clarity in India’s definitions for single malt and single grain whiskies, as well as standards related to brand owners, date markings, non-retail containers, multi-unit packs, and spirits-based ready-to-drink (RTD) beverages.

Additionally, despite India’s Food Safety and Standards Authority (FSSAI) addressing some US concerns in 2020 and 2023 amendments, issues such as acceptance of US certificates of analysis (CoA) from certified laboratories remain unresolved.

The report also highlights India’s tariff increases post-2014, starting with certain telecommunications equipment. It notes that the 2019/2020 budget introduced tariff hikes on 70 product categories without prior notice or consultation, followed by 31 additional tariff increases in 2021/2022, impacting solar inverters, lanterns, imported headphones, loudspeakers, and smart meters.

After the US withdrew India’s preferential tariff benefits under the Generalized System of Preferences (GSP) program in 2019 due to non-compliance with eligibility criteria, India imposed retaliatory tariffs ranging from 1.7% to 20% on 28 American products in June 2019.