‘Mixed Bag, Not Setback’: India Responds to Trump’s 26% Tariff Move
India is closely evaluating the impact of the 26% reciprocal tariffs imposed by the US, with a senior government official describing the development as a “mixed bag” rather than a setback. The tariffs, announced by US President Donald Trump on Wednesday, are part of a broader trade policy shift set to take effect in phases from April 5, prompting the commerce ministry to assess potential responses and opportunities for negotiation.
The US will impose a universal 10% tariff on all imports starting April 5, with an additional 16% to follow from April 10, totaling 26% for India. This comes under Trump’s “discounted” reciprocal tariff framework, targeting nations he claims impose high duties on American goods.
The policy also includes a 25% tariff on non-US assembled automobiles, effective April 3, potentially affecting India’s export-driven sectors.
Speaking to news agency PTI, a senior official said, “It is a mixed bag and not a setback for India.” The commerce ministry is analyzing the tariffs’ implications, viewing them as both a challenge and a chance to address trade concerns with the US.
The official noted that the Trump administration might reduce duties if India resolves specific issues, with bilateral trade talks already in progress.
During a White House Rose Garden address, Trump called the tariffs a historic step. “This is Liberation Day… April 2, 2025, will be remembered as the day American industry was reborn,” he declared, emphasizing his goal to reclaim economic strength.
He singled out India, stating, “India, very, very tough. They charge us 52%. The prime minister just left. He’s a great friend of mine, but I said, you’re not treating us right.” Trump’s chart showed India’s 52% duties, justifying the 26% reciprocal rate.
India and the US are working toward a bilateral trade agreement, aiming to finalize its first phase by September-October 2025. The official hinted that addressing US concerns could soften the tariff impact, offering a diplomatic pathway forward.
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Commerce Minister Piyush Goyal’s recent Washington visit underscored efforts to secure a deal, targeting $500 billion in bilateral trade by 2030.
The tariffs could affect Indian exports like electronics, gems, and automobiles, though sectors like pharmaceuticals may remain exempt. An SBI Research report earlier suggested a modest 3-3.5% export decline, cushioned by India’s diversified trade portfolio.
The ministry’s analysis will determine how these duties reshape India’s trade strategy with its largest trading partner.
