Report Highlights High Tariffs, Trade Barriers, and Policy Uncertainties
📌 Washington/New Delhi (Economy Indi): The United States has raised objections to India’s import policies and non-tariff barriers, calling them a major trade hurdle in a recent report. The 2025 National Trade Estimate report by the United States Trade Representative (USTR) states that India’s Most-Favored-Nation (MFN) average tariff rate is 17%, the highest among major global economies.
This report comes just ahead of April 2, when reciprocal tariffs are set to be implemented, further impacting trade dynamics between the two nations.
India’s High Tariff Structure Under Scrutiny
The USTR report highlights India’s high import tariffs, particularly on agricultural, pharmaceutical, and industrial products, creating barriers for U.S. exporters.
- India’s average non-agricultural tariff: 13.55%
- India’s average agricultural tariff: 39%
- High tariffs on processed foods, poultry, almonds, apples, citrus fruits, biscuits, chocolates, and frozen French fries
- Over 20% basic customs duty on essential medicines listed by WHO
According to the U.S., these tariff policies limit American exports to India and distort trade competitiveness.
Telecom, Electronics Face Heavy Import Duties
The report criticizes India’s tariff policies on telecom and electronic goods, stating that they violate WTO commitments.
- High tariffs on headphones, loudspeakers, and smart meters
- Tariff hikes on network switches and telecom equipment
- Withdrawal of duty-free import benefits on critical telecom components
U.S. officials argue that these policies restrict market access for American technology firms and create uncertainty in trade regulations.
Unpredictable Tariff Changes a Major Concern
The USTR report also raises concerns over India’s frequent and sudden changes in tariff rates, making it difficult for importers and exporters to plan effectively.
- Lack of advance notification on tariff changes
- Unpredictable regulatory shifts impacting foreign businesses
- Complex approval process for certain imports
According to the U.S., India’s trade policies lack transparency, which discourages investment and trade partnerships.
Non-Tariff Barriers Hindering Trade
Beyond tariffs, the report highlights non-tariff barriers (NTBs) as a major issue.
- Import restrictions on animal-fat-based products
- Mandatory non-automatic import licenses for several goods
- Government-controlled import processes for certain agricultural and electronic products
The report also claims that India fails to comply with WTO transparency norms, as it does not properly notify WTO committees about import restrictions.
Dairy and Agricultural Trade Disputes Continue
The U.S. has long criticized India’s strict dairy import regulations, which require that dairy products come from animals not fed with animal-derived feed.
- This rule blocks U.S. dairy exports to India, a major concern for American producers
- India’s Minimum Support Price (MSP) policy on crops like rice creates unfair competition
- India holds a 40% share in global rice exports, allegedly due to MSP advantages
The U.S. argues that India’s MSP and export subsidy policies violate fair trade practices and give Indian exporters an unfair advantage in global markets.
India-US Trade Talks & Future Outlook
Trade disagreements between India and the U.S. have persisted despite efforts to strengthen bilateral ties.
- A four-day trade negotiation was recently held between the two countries
- U.S. officials continue to push for greater market access for American agricultural, dairy, and industrial products
- The introduction of reciprocal tariffs on April 2 could further impact trade relations
With India maintaining high tariff and non-tariff barriers, trade tensions between the two countries are unlikely to be resolved soon. The U.S. is expected to raise these concerns at WTO meetings and other global trade forums.
(Economy India)
