February 25th 2025.
New Delhi: The United States is planning to impose reciprocal tariffs on all trading countries by April 2. In response, the Indian government has taken swift action by forming a high-level committee to review tariff relief on imports from the US.
The committee, which falls under the Union Commerce Ministry, is expected to submit its report by March 15. This report will then be presented to both the Ministry of Commerce and the Ministry of Finance for further consideration.
According to sources familiar with the situation, the government review is specifically looking at tariffs ranging between 15-20%, 50-70%, and 70-80%. The goal is to determine if any adjustments can be made to these rates by identifying specific products under an "8-digit code" for custom purposes.
The committee's main responsibility is to carefully evaluate imported goods and make recommendations for any necessary tariff adjustments. Once their report is submitted, the final decision on tariff relief will be reviewed by the Prime Minister's Office before being put into action.
It is worth noting that India has already taken steps to address concerns about high tariffs on foreign goods. Therefore, the review panel's work is crucial in determining the country's response to the US's proposed tariffs.
In the Union Budget of 2025-26, India made significant tariff cuts on products such as bourbon whisky, fish hydrolysate, scrap materials, satellite equipment, ethernet switches, and high-end motorcycles. This shows the government's willingness to promote fair trade practices.
Fortunately, the US's tariff on semiconductors is not expected to have a major impact on India, as it is not a major exporter of chips to the nation. Additionally, domestic automotive manufacturers are also not likely to suffer any significant consequences from the US's reciprocal tariffs, as their main market is within India.
Furthermore, the US's tariffs on the steel sector are not expected to have a significant impact on India either. According to a report by Crisil Intelligence, only 2% of India's total finished steel exports in the first nine months of this fiscal year were to the US.
In conclusion, India is taking all necessary measures to carefully consider and respond to the US's proposed tariffs. The formation of the high-level committee and the timely submission of their report show the government's dedication to promoting fair and balanced trade practices.
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