US president Donald Trump listed the high tariffs allegedly charged by India on American products as he announced reciprocal tariffs on countries across the board, declaring a 26 per cent “discounted reciprocal tariff” on India.
“This is Liberation Day, a long-awaited moment. 2nd April 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again. We are going to make it wealthy, good, and wealthy,” Trump said on Wednesday, 2 April, in remarks from the Rose Garden at the White House as he announced the closely watched reciprocal tariffs on countries that impose levies on American goods.
“The United States charges other countries only a 2.4 per cent tariff on motorcycles. Meanwhile, Thailand and others are charging much higher rates, like 60 per cent. India charges 70 per cent, Vietnam charges 75 per cent, and others charge even higher rates,” he said.
“Likewise, until today, the United States has, for decades, charged a 2.5 per cent tariff. Think of that 2.5 per cent on foreign-made automobiles. The European Union charges us more than 10 per cent tariffs, and they have a 20 per cent VAT — much, much higher.
“India charges 70 per cent, and perhaps worst of all are the non-monetary restrictions imposed by South Korea, Japan, and many other nations as a result of these colossal trade barriers.”
As he announced the tariffs, he held up a chart that showed the tariffs that countries such as India, China, the UK and the European Union charge, along with the reciprocal tariffs that these countries will now have to pay.
The chart indicated that India charged 52 per cent tariffs, “including currency manipulation and trade barriers”, Trump claimed, and said America would now charge India a “discounted reciprocal tariff” of 26 per cent.
“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 per cent. You have to understand, we charged them almost nothing for years and years and decades... and it was only seven years ago, when I came in, that we started with China,” the POTUS went on.
However, India could maintain or even expand its agricultural exports to the United States despite the new tariffs — as competing nations face even steeper duties, prominent agricultural economist Ashok Gulati said on Thursday, 3 April.
The 26 per cent "discounted reciprocal tariff" on Indian goods imposed by Trump should have limited impact on key agricultural exports such as seafood and rice, when compared to higher duties imposed on the regional competitors, according to Gulati, former chairman of the Commission for Agricultural Costs and Prices (CACP).
"We should not look at the tariff increase in absolute terms, but see relative tariff increases with our competitors," Gulati told PTI.
He noted that while India faces 26 per cent tariffs, China faces 34 per cent, creating an 8 per cent differential advantage for the Indian exporters.
Other competitors face even steeper barriers, with Vietnam at 46 per cent, Bangladesh 37 per cent, Thailand 36 per cent, and Indonesia at 32 per cent.
At home, meanwhile, the Opposition Congress party's Rajya Sabha MP Randeep Surjewala has highlighted that a comparison is also due between the subsidies given to American farmers and the travails of Indian farmers and agricultural workers under the Narendra Modi dispensation.
If Trump has shorn US farms of workers with his immigration crackdown, the Modi government has long been in a standoff of almost half a decade with farmers across the country looking for an MSP guarantee on key crops, if not all.
Pointing out that the US would like to import its wheat, corn and cotton to India, Surjewala noted that this is an issue for farmers back home who grow those same crops.
Surjewala added a word on behalf of the embattled apple farmers of Himachal Pradesh and Kashmir as well: “The US wants India to reduce tariffs on Washington apples from 50 per cent to 15 per cent. This raises concerns for India's 62 crore farmers, who have been demanding a compulsory law on MSP for three years.”
On the topic of agricultural subsidies, he said, “The US provides an annual subsidy of Rs 26 lakh [equivalent] to each farmer, whereas Indian farmers receive only Rs 6,000.” It is a pittance, to be sure, even accounting for economic disparities and currency rates.
For seafood exports, particularly shrimp, Gulati explained that India's relative tariff advantage, combined with shrimp's small share in the overall US food expenditure means the demand is unlikely to shrink significantly.
However, there are lesser-burdened competitors further afield too.
The general secretary of Shrimp Feed Manufacturers Association of India, Gulrej Alam, said India is a major exporter of shrimp to the US, with about half of the country's total annual export of 9 lakh tonnes shipped there.
"There will be a little setback in the short term because of a lower tariff of 10 per cent imposed on Ecuador, which is also one of the major shrimp exporters to America," Alam said, adding that this will be a cause of concern for Indian shrimp production.
Located close to the US, Ecuador has a logistical advantage. However, India has bulk handling capacity and better quality packing, Alam noted.
"In the short term, the trade will see re-routing. However, in the long term, trade will not be a challenge," he added.
Is Alam being overly hopeful? There have been other curbs on India's shrimp fishing industry from the US, as Congress’ K.C. Venugopal highlighted in Parliament last year.
Since 2019, the US government had banned wild-caught Indian shrimp (this does not affect shrimp farming in India for export, of course).
Venugopal pointed out an estimated loss of Rs 2,500 crore for Indian fisherfolk about concerns around fishing practices that do not protect sea turtles adequately — even though the species are relatively uncommon along our coasts, explaining why Indian fishers are reluctant to invest in equipment to meet the US requirements.
For rice exports, however, where current US tariffs are 9 per cent, India maintains a competitive edge against Vietnam and Thailand despite the increase to 26 per cent.
Vijay Sethia, a former president of the All India Rice Exporters Association, said India exports 250,000 to 300,000 tonnes of rice annually to the US.
"The 26 per cent tariff on all varieties of rice will definitely slow down our exports in the short term but will capture its space in the long term," Sethia said, adding that the duty hike will ultimately hurt the American consumers worst.
Meanwhile Gulati, currently chair professor for agriculture at the Indian Council for Research on International Economic Relations (ICRIER), suggested that India could potentially gain market share in spaces vacated by higher-taxed competitors.
With PTI inputs
