Reciprocal Tariffs by U.S. may not hurt India much, says GTRI

Reciprocal Tariffs by U.S. may not hurt India much, says GTRI

Sub :Eco

Sec: External sector

 Why in News?

• The US has introduced “reciprocal tariffs” to match or offset tariffs imposed by its trading partners, signalling a shift from WTO trade norms. This move aims to address trade imbalances and protect US domestic industries.
• India’s exports may not be significantly affected due to differences in export profiles between the two countries, as per GTRI.

Key Insights

How reciprocal tariffs has minimal impact on India

• As per Global Trade Research Initiative (GTRI) – U.S. tariffs will have limited impact on India, since India’s export composition is different from the U.S. imports. Example – Pistachios Case – If the U.S. imposes a 50% reciprocal tariff on Indian pistachios, India remains unaffected as it does not export pistachios to the U.S.
• For 75% of U.S. exports to India, the average tariff is less than 5% (India levies low duties on several U.S. imports.)
• Indian textiles and footwear already face 15%–35% tariffs in the U.S., impacting labor-intensive industries.