The United States’ push to get India to reduce import duties may not yield much for the country, as less than 4 percent of the products from the North American country attract tariffs of over 30 percent, according to a market analysis.
US Ambassador to India Eric Garcetti called for tariffs to be lowered on December 20. Speaking at the US India Business Council event, Garcetti noted the need to make trade “fair and equal” by reducing tariffs.
Garcetti’s statements follow those of President-elect Donald Trump, who last week noted that India charges high tariffs and that the US will follow a reciprocal approach.
The President-elect, who will take the oath of office in January, has already threatened tariffs on China, Mexico, and Canada and called for retaliatory measures if the BRICS nations move to finalise a currency.
Analysis of 3,638 tariff lines for which data is available for 2023-24 shows that 63.5 percent of categories attract less than 10 percent tariff, while another 17.9 percent, or 651 items, attract 10-20 percent tariff.
Just 20 items attract a tariff of over 100 percent, the chief among them being cars and motorcycles imported from the United States.
Harley-Davidson became a point of contention during Trump’s last term in office. Tesla has been eyeing India. Elon Musk, founder of Tesla, is part of Trump administration.
EVs from the US, at present, attract a 125 percent tariff, as per World Bank data.
The maximum tariff of 150 percent is applicable to wines, whiskies, rum and other alcohol.
Another 42 products attract 60-100 percent tariff and 1.9 percent between 30-60 tariff.
In terms of value, these categories account for just 0.4 percent of the trade to India in 2023-24.
Of the over $40 billion of imports to India, 81.8 percent was within categories that attracted 10 percent or less tariffs, while 15 percent is within categories that attracted 10-20 percent tariffs.
Analysis shows that reducing duties in these categories may not yield much either and could only increase US imports to India by $5 billion, even if it corners the entire market.
India’s total imports in items, which attract over 40 percent tariff from the US was $5.12 billion, while the US contributed only $160 million in 2023-24.