US Reduces Tariffs on India: Implications for Global Trade

The US Supreme Court ruling declared Trump's global tariffs illegal, reducing India's reciprocal tariffs to 10%. This enhances competitiveness in US sectors like pharma and textiles. India should leverage this improved position for market expansion and pursue a stable trade agreement with the US.

The United States has slashed its reciprocal tariffs on Indian goods from 25% to 10%, a move expected to boost the competitiveness of key labor-intensive sectors in the US such as pharmaceuticals, electronics, and textiles. The reduction follows a Supreme Court ruling that found former President Trump's sweeping tariffs illegal.

With the US being a major export destination, this tariff cut is anticipated to significantly aid Indian exporters, making their products more competitive in the US market. Despite this positive development, certain tariffs on steel, aluminum, and auto products remain in place, presenting ongoing challenges.

Ajay Sahai, Director General of the Federation of Indian Export Organizations, emphasized the opportunity for India to expand its market share and continue trade negotiations with the US. He suggested that a comprehensive trade agreement could provide long-term predictability, offering assurances against future tariff hikes through alternate legal routes.