NEW DELHI: After failing to clinch an interim trade deal, the US on Wednesday imposed a 25% reciprocal tariff (plus a penalty for doing business with Russia) on India—much to the latter’s chagrin as it was expecting it would be less than 20%. While the 25% levy, which will kick in from August 1, is lower than 26% announced earlier, the ‘Russia penalty’ means a major rise in overall levies on goods exported to the US. India was hoping for a lower tariff of 15-20%, which could have given it an edge over many other Asian economies. But now, the country stands to lose the competitive edge over Vietnam (20% tariff), Indonesia (19%), and Japan (15%). China attracts an additional tariff of 30%. While announcing the tariff, US President Donald Trump made no bones about his displeasure at ‘friend’ India’s high tariff regime and its close business ties with Russia. In his Truth Social post, Trump said India’s tariffs are among the highest in the world, and its non-monetary trade barriers are the most strenuous.
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