28th August 2025 (12 Topics)
1
Aug
2
Aug
4
Aug
5
Aug
6
Aug
7
Aug
8
Aug
9
Aug
11
Aug
12
Aug
13
Aug
14
Aug
15
Aug
16
Aug
18
Aug
19
Aug
20
Aug
21
Aug
22
Aug
23
Aug
25
Aug
26
Aug
27
Aug
28
Aug
29
Aug
Countering US Tariff Barriers
You must be logged in to get greater insights. click here to login
Context:
The US has imposed additional "secondary tariffs" of 25% on Indian exports, violating WTO commitments, thereby impacting bilateral trade prospects and India’s export diversification strategy.
US Tariff Actions and Impact
- Unilateral Tariffs: The US imposed new tariffs on Indian exports such as pharmaceuticals, semiconductors, mobile phones, and chemicals, in addition to earlier tariffs, disregarding multilateral trade rules.
- Bilateral Trade Target: India and the US had earlier set an ambitious bilateral trade goal of $500 billion by 2030, but immediate tariff escalation undermines that trajectory.
- WTO Violation: These tariffs contradict WTO’s Most Favoured Nation (MFN) principle, violating rules of non-discrimination in trade practices.
India’s Challenges and Constraints
- Narrow Export Basket: Nearly 60% of India’s exports to the US are concentrated in pharmaceuticals, mobile phones, gems and jewellery, and engineering goods, making India vulnerable to targeted tariffs.
- Competition from Asia: Competitors from South and Southeast Asia, with diversified low-to-medium value exports, may replace Indian exporters in the US market.
- Domestic Pressures: Farmers, small industries, and workers dependent on affected export sectors face immediate livelihood risks.
Way Forward for India
- Export Diversification: India must expand its export destinations beyond the US and EU, building stronger trade ties with ASEAN, Africa, BRICS, and Latin America.
- Strategic Negotiations: India should pursue trade diversification while simultaneously engaging in WTO dispute mechanisms to safeguard its interests.
- Long-term Reforms: Broader domestic reforms in competitiveness, logistics efficiency, and technological upgrading are critical to withstand global trade shocks.
Practice Question
The recent imposition of tariffs by the United States on Indian exports has once again highlighted vulnerabilities in India’s trade structure. Critically examine the challenges posed by unilateral trade measures for India and suggest strategies to diversify its export basket and markets. (250 words)
More Articles
Courses
Study
Notes
Home
Resources
More
