Is India actually a “very large abuser” of commerce ties with the US and levies excessive import tariffs on merchandise from there? A brand new report by financial assume tank World Commerce Analysis Initiative (GTRI) says that is incorrect, mentioning that a number of international locations impose excessive tariffs on numerous merchandise to guard their home business.
“Whereas India wants severe tariff reforms, the label of ‘Tariff King’ doesn’t maintain up when in comparison with the tariff practices of the USA and different main economies,” stated the report, which has analysed import duties levied by India and the US. It has prompt that the US ought to think about signing a free commerce settlement with India whether it is eager on zero tariffs however has famous that the US has had a cautious method even within the Indo-Pacific Financial Framework, the place no tariff cuts have been included.
“India has already eliminated tariffs on most imports from its FTA companions like ASEAN, Japan, and South Korea, exhibiting its openness to free commerce. Nonetheless, regardless of India’s willingness, the U.S. has been reluctant to scale back tariffs by means of FTAs,” stated the report by Ajay Srivastava, Founder, GTRI.
Former US President and Republican Presidential nominee Donald Trump had lately known as India “an abuser” of import tariffs, a declare that echoed his October 2020 assertion labelling India the ‘Tariff King’.
The report conceded that whereas it’s true that India imposes excessive duties on choose merchandise, it stated that Trump’s argument overlooks important context, making his accusations unfair. “Trump doesn’t discuss common tariffs however singles out merchandise with the very best tariffs charged by India,” it stated.
For example, Trump had on January 24, 2019 stated that India costs a 150% import tariff on US whiskey. The report identified that whereas India does impose excessive duties on many objects, together with a 150% responsibility on whiskey and wines and 100%- 125% responsibility on vehicles, it’s not the one nation to take action.
“Many countries shield home industries by imposing important tariffs on sure objects. World tariff profiles 2023 printed by the WTO lists the information on the very best tariff charged by international locations,” it identified. Japan might like to guard its rice farmers, the US its tobacco farmers and India its rising wine business.
The very best tariffs of another international locations embody 457% by Japan, 887% by Korea and 350% by the US.
But, excessive tariff objects don’t characterize the tariffs at which precise commerce occurs for many objects, it additional stated. “The actual situation lies in Trump’s concentrate on particular person excessive tariffs somewhat than common or trade-weighted tariffs, which provide a extra correct illustration of a rustic’s commerce coverage,” it stated, mentioning that whereas India’s common tariff charge of 17% is larger than the U.S.’s 3.3%, it’s similar to different main economies like South Korea (13.4%) and China (7.5%).
