Trump’s 26% Tariffs On India Come Into Effect, Cabinet Meet To Be Held Today

New York: US President Donald Trump’s market-hammering 26% tariffs on India came into effect on Wednesday, with the stock market opening in the red amid concerns of a global trade war. With markets in a free fall since Trump’s reciprocal tariff announcement last week the Union Cabinet will hold a crucial meeting today to strategise on ways to minimise the impact.

India, which has been called a “big abuser” of trade ties repeatedly by Trump, supplies nearly half of all generic medicines in the US. Exports in key sectors like auto parts, gems and jewellery will take a hit. Sources said the government was in touch with exporters to minimise the impact of tariffs.

Instead, the government is actively working on the US-India trade deal that was announced during Prime Minister Narendra Modi’s US visit earlier this year. In March, the two nations agreed to the terms of reference for the Bilateral Trade Agreement (BTA). In fact, at the heart of Trump’s move is his argument that nations impose unfair levies on US exports while enjoying preferential access to the American market.

India has already lowered tariffs on US bourbon whisky and Harley-Davidson motorbikes. It has also dropped a tax on digital services, known as ‘Google Tax’, that affected US tech giants in an attempt to win over Trump.

Experts have pointed out that the sweeping tariffs announced by Trump would affect rival exporters more, providing India with opportunities. India’s Asian peers, like China (34%), Vietnam (46%), and Indonesia (32%), have been hit by higher tariffs.