India not an ‘abuser’ of tariffs, Trump’s claims unfair: GTRI

Last Updated23/09/2024

Former U.S. President Donald Trump's recent claim that India is an "abuser" of import tariffs is unfair as many nations including the U.S. protect their domestic industries by imposing high customs duties on certain products

Former U.S. President Donald Trump's recent claim labeling India as an "abuser" of import tariffs has drawn criticism, with think tank Global Trade Research Initiative (GTRI) calling it unfair and lacking context.
According to GTRI, while India does impose high tariffs on certain products, many nations, including the U.S., protect domestic industries with similarly high tariffs on select items.

As per WTO’s World Tariff Profiles 2023, the U.S. imposes significant tariffs on various goods:
- Dairy products: 188%
- Fruits and vegetables: 132%
- Cereals and food preparations: 193%
- Oilseeds, fats, and oils: 164%
- Beverages and tobacco: 150%
These numbers demonstrate that the U.S. also employs protectionist measures on certain sectors of its economy. GTRI argues that Trump’s criticisms single out India’s highest tariffs, ignoring the broader average tariff rates and trade-weighted tariffs that provide a more balanced view of India’s trade policy.

India’s average tariff rate is 17%, higher than the U.S.'s 3.3%, but comparable to other major economies like South Korea (13.4%) and China (7.5%).
India also participates in free trade agreements (FTAs) with partners like ASEAN, Japan, and South Korea, demonstrating a willingness to reduce tariffs under mutually beneficial agreements.
In response to Trump’s claims, GTRI Founder Ajay Srivastava pointed out that most countries apply high tariffs on a few select items for domestic protection, such as Japan’s 457% tariff on rice and Korea’s 887% tariff on certain goods.
He argued that average tariffs, rather than the highest outliers, are a more accurate representation of a country's trade policy.

India imposes 150% tariffs on whiskey and 100-125% tariffs on automobiles, which are high but similar to practices in other countries. For instance, Japan and the U.S. maintain high tariffs on select items like rice and tobacco to protect specific domestic industries.
Srivastava emphasized that India, like most nations, levies high tariffs on a limited number of products to safeguard domestic industries. However, these do not reflect the overall tariff rates applied to the majority of goods traded internationally.

Srivastava suggested that if the U.S. seeks zero-tariff access to the Indian market, it should consider negotiating a free trade agreement (FTA) with India, similar to those India has with other nations.
However, he noted that the U.S. has shown reluctance to engage in such negotiations, as seen in the Indo-Pacific Economic Framework, which excluded tariff reductions.