India To Explore Reciprocal Tariffs Following US Duties On Key Exports: Jitin Prasada

(MENAFN- KNN India) New Delhi, Aug 13 (KNN) India is closely monitoring the effects of additional tariffs imposed by the United States on its exports and is actively seeking feedback from industry stakeholders regarding the assessment of reciprocal tariffs, according to Minister of State for Commerce and Industry Jitin Prasada.

Speaking in a written reply to the Lok Sabha on Tuesday, Prasada stated that multiple factors including product differentiation, demand, quality, and contractual arrangements would determine the impact of reciprocal tariffs on India's exports, particularly in the textiles sector.

The minister emphasised that the government is engaged with all stakeholders, including exporters and industry representatives, to gather comprehensive feedback on the tariff impact assessment.

The tariff measures stem from an executive order issued by US President Donald Trump on July 31, which imposed reciprocal tariffs of varying degrees on all trading partners, including a 25 percent reciprocal tariff on Indian exports except those in exempted categories.

Subsequently, on August 6, the US imposed an additional 25 percent tariff on imports from India, citing India's purchase of Russian oil as justification. The reciprocal tariffs took effect on August 7, while the additional tariffs are scheduled to become effective from August 27.

The scope of these tariffs is significant, with Prasada noting that approximately 55 percent of the total value of India's merchandise exports to the US will be subject to reciprocal tariffs.

This translates to more than half of India's goods exports worth USD 86.7 billion to the US in FY25 being affected by what amounts to a steep 50 percent combined tariff rate when both measures are fully implemented.

However, Prasada clarified that no additional tariffs have been imposed on Indian exports in sectors that were previously exempted, such as pharmaceuticals and electronics.

The minister also highlighted India's participation in discussions regarding a bilateral trade agreement (BTA) aimed at expanding trade and investment through tariff stability and long-term trade predictability.

In response to the tariff challenges, the government disclosed during a briefing to Parliament's Standing Committee on Foreign Affairs on Monday that an export diversification strategy is being finalised to mitigate the impact of US tariffs on Indian exports.

Officials reiterated that India would maintain its established red lines in BTA negotiations, particularly regarding agriculture and dairy sectors, despite US pressure to dismantle import tariffs across most sectors as part of the bilateral agreement.

Prasada concluded his statement by reaffirming the government's commitment to protecting and promoting the welfare of farmers, workers, entrepreneurs, exporters, micro, small and medium enterprises (MSMEs), and all segments of industry during these trade negotiations and tariff adjustments.

(KNN Bureau)

MENAFN13082025000155011030ID1109924650