| Goods Category | U.S. Old Tariff | India Old Tariff | U.S. New Tariff | India New Tariff |
|---|---|---|---|---|
| General Imports | 2.2% (average) | 17% (average) | 10% (baseline) | No change |
| Steel and Aluminum | 25% | 7.5–15% | 25% | No change |
| Auto and Auto Components | 2.5% | 60–100% | 25% | No change |
| Agricultural Products | Varies (up to 50%) | 39% (average) | Up to 100% (e.g., tobacco) | No change |
| Pharmaceuticals | Exempt | 10% | Exempt | No change |
| Textiles and Apparel | 14–32% | 10–20% | 10% (baseline) | No change |
| Gems and Jewelry | ~5.5% | ~7.5% | 10% (baseline) | No change |
🛍️ General Imports
Why targeted?This broad category encompasses a wide range of consumer items imported into the United States from India. The United States targeted these goods to put pressure on India's trade policies and correct the trade deficit. The main purpose of placing a 10% tariff on certain commodities is to:
- Minimize the total trade deficit by discouraging excessive imports.
- Encourage domestic manufacturing by raising the cost of imported goods for consumers, hence benefiting US industries that compete with these goods.
- Tariffs can be used as a bargaining point in broader trade negotiations with India, perhaps leading to more favorable conditions in other areas.
🔩 Steel and Aluminum
Why targeted?Steel and aluminum are essential to the United States' manufacturing and defense industries, and the country has historically sought to preserve these sectors. The 25% tariff on steel and aluminum imports from India is intended to:
- Protect US steel and aluminum manufacturers against foreign competition, especially from countries accused of dumping.
- Ensure that the United States has an adequate supply of these critical commodities, which are utilized in everything from infrastructure to military equipment.
- Pressure India and other nations to cut steel and aluminum subsidies, which could lead to global market glut and have an impact on US producers.
🌾 Agricultural Items
Why Targeted?Agricultural items such as tobacco, sugar, and certain grains are critical to both US agriculture and worldwide food markets. The United States targeted agricultural products to:
- Protect domestic US farmers from foreign competition, particularly in sensitive sectors like tobacco and sugar, where production costs are high and markets are heavily subsidized.
- Apply pressure on India to expand its agricultural markets and remove non-tariff barriers that make it difficult for US agricultural products to enter.
- Use tariffs to influence Indian agricultural policies, such as subsidies and trade practices that may harm US farmers.
💊 Pharmaceuticals
Why Not Targeted?Interestingly, medications are excluded from tariffs. India is a big producer of generic pharmaceuticals, and its exemption reflects strategic thinking. Here's why:
- India's affordable generic medications are critical to U.S. healthcare, helping to reduce consumer costs. Tariffs might raise prices, affecting US consumers, especially those who rely on generic pharmaceuticals.
- The United States also wishes to preserve a healthy relationship with India in the pharmaceutical industry, where India plays a critical role in providing life-saving drugs.
👗 Textiles and Apparel
Why Targeted?Tariffs have also been used in the textile and garment sectors. However, the United States reduced duties on these products to 10%, which may appear illogical. Here's why:
- The United States aims to ensure that its textile industry stays competitive with imports, particularly from countries with lower production costs, such as India.
- Lower tariffs in this industry benefit US consumers by making cheaper clothes and apparel available while maintaining domestic firms' competitiveness.
💎 Gems & Jewelry
Why Targeted?India is a major exporter of gems and jewelry to the United States, and tariffs in this sector were recently boosted to 10%. The United States targets this industry to:
- Given India's dominance in the diamond and jewelry markets, the US wants to ensure that its domestic enterprises may compete fairly.
- The United States may also use this tax as leverage in larger trade negotiations to assure reciprocal access to the Indian market for US
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