The revised tariff structure will be applied in two stages: The first 25% hike is effective from tonight (eastern time), while the additional 25% will be applicable after 21 days of levy order signature.
This step widen the difference between India and competitive countries such as Bangladesh, Vietnam and Pakistan. Bangladesh’s tariff rate has come down from 35% to 20%, while Pakistan will now pay 19% instead of 29%, after a recent trade agreement with the US. Vietnam has also made a deal to reduce its tariff rate by 20%.
Sector affected
Beyond the garment and garment, the increased tariff gems and jewelery, shrimp, leather and shoes, animal products, chemicals and exports of electrical and mechanical machinery will also affect.
However, some product categories are exempted from hike. These include pharmaceutical goods, energy resources (such as crude oil, refined fuel, natural gas, coal and electricity), significant minerals, and electronic components such as smartphones, computers, tablets, SSDs, flat-paanl displays and integrated circuits.
Sudarshan Jain, general secretary of the Indian Pharmaceutical Alliance, welcomed the exemption for Pharma, given that general medicines from India are important for cheap healthcare in the US.
According to the White House, tariff growth is inspired by the ideas of national security and foreign policy. President Trump cited India’s continuous or indirect import of Russian oil as “unusual and extraordinary threats” to the United States. 50% tariff will be applicable to all Indian goods imported in the US, which will already except for transit or people falling under specific discount.
India responds rapidly
India’s Foreign Ministry (Mea) condemned the move, called it “unfair, inappropriate and unfair”. In an official statement, Mea said, “The United States has targeted India’s oil imports from Russia in recent times. We have already clarified our position, including the fact that our imports are based on market factors and aimed to ensure energy security for 1.4 billion people.”
The statement said, “It is very unfortunate that America should choose to put additional tariffs on India for those tasks that many other countries are also taking in their national interest. India will take all the action necessary to protect its national interests.”
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