by
Dr. H. A. C. Prasad
In the earlier Blog, the impact of US punitive tariffs on India was analysed in detail at the sectoral level and at 2 HS commodity level. Now let us see the possibility of retaliatory tariffs by India, if at all the Government thinks of doing it.
In 2018/2019 under Trump 1, the following developments were seen.
In the first phase, the US imposed a global tariff on the US steel imports of 25% and additional tariffs on the US Aluminium imports of 10 % under section 232 of US Trade Expansion Act 1962.This however was not exclusively against India and was directed on all countries unlike the present one directed against India only.
The second phase of Tariff Conflict between the US and India was more direct on India when GSP benefits were withdrawn from India on June 5,2019 automatically resulting in MFN tariffs for these items formerly under GSP in imports from India. It also triggered a 25% duty on solar cells which India was exempted from as long as it was a GSP beneficiary.
The US even took India out of Developing Countries’ list citing India’s share in World Trade above 0,5% and on account of India being a G-20 member. As a result, India was no longer eligible or special preferences under the methodology for CVD investigations.
After multiple pauses, India imposed retaliatory tariffs on 28 items imported from the US, from June 2019.The main items in this list were Agricultural items like Almonds, Apples fresh, Iron and Steel and Chemicals.
However later the tariff issues were resolved and the retaliatory tariffs were removed.
In 2025 under Trump 2, Tariff war by the US on India and Other Countries have reached new heights. Reducing tariffs by India in the Budget for motorcycles with engine capacity not exceeding 1600cc from 50% to 40% and those with 1600cc and above from 50% to 30% making Harley Davidson more affordable has not helped much in avoiding the tariff ire of Uncle Sam. Given the punitive nature of the reciprocal tariffs levied on India by the US, India can levy retaliatory tariffs on the US. For this let us examine the important imports of India from the US
The important imports of India and India’s tariffs on them which are not country-specific are given in Table 1. As can be seen in the table ,the share of major imports of India from the US are mineral fuels, etc 31.4 % ( 0 % tariffs) ,natural or cultured precious or semi-precious stones 11.6 %(15 % tariffs), nuclear reactors,boilers,machinery,etc,9,7% (6.6 to 7.6% tariffs),electrical machinery and equipment 7.4%(6.6 to 7.6% tariffs),Optical, photographic, cinematographic measuring instruments 4.5% (12-40% tariffs) .aircraft, spacecraft and parts thereof 3.7% (8-21% tariffs).However. the highest tariffs of India are on Agricultural and related items at 38%. These are average tariffs under a particular HS code, though for some items at 8-digit level tariffs may be higher. The present US tariffs on India, which are country-specific are very much higher than the tariffs levied by India on US which are on a MFN basis.
Table 1: India's Imports from US and Tariffs
|
HSCode |
Commodity |
Share in Total Imports of India from US in 2024-25 |
Growth in 2024-25 |
India's Tariffs |
|
01 |
LIVE ANIMALS. |
0.02 |
13.29 |
~38% |
|
02 |
MEAT AND EDIBLE MEAT OFFAL. |
0.00 |
- |
~38% |
|
03 |
FISH AND CRUSTACEANS, MOLLUSCS AND OTHER AQUATIC INVERTABRATES. |
0.07 |
41.90 |
~38% |
|
04 |
DAIRY PRODUCE; BIRDS' EGGS; NATURAL HONEY; EDIBLE PROD. OF ANIMAL ORIGIN, NOT ELSEWHERE SPEC. OR INCLUDED. |
0.00 |
-49.60 |
~38% |
|
05 |
PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED. |
0.03 |
19.73 |
~38% |
|
07 |
EDIBLE VEGETABLES AND CERTAIN ROOTS AND TUBERS. |
0.20 |
294.09 |
~38% |
|
08 |
EDIBLE FRUIT AND NUTS; PEEL OR CITRUS FRUIT OR MELONS. |
2.45 |
7.20 |
~38% |
|
09 |
COFFEE, TEA, MATE AND SPICES. |
0.01 |
49.37 |
~38% |
|
10 |
CEREALS. |
0.01 |
98.93 |
~38% |
|
12 |
OIL SEEDS AND OLEA. FRUITS; MISC. GRAINS, SEEDS AND FRUIT; INDUSTRIAL OR MEDICINAL PLANTS; STRAW AND FODDER. |
0.05 |
19.08 |
~38% |
|
15 |
ANIMAL OR VEGETABLE FATS AND OILS AND THEIR CLEAVAGE PRODUCTS; PRE. EDIBLE FATS; ANIMAL OR VEGETABLE WAXEX. |
0.30 |
1,491.24 |
~38% |
|
16 |
PREPARATIONS OF MEAT, OF FISH OR OF CRUSTACEANS, MOLLUSCS OR OTHER AQUATIC INVERTEBRATES |
0.01 |
22.37 |
~38% |
|
17 |
SUGARS AND SUGAR CONFECTIONERY. |
0.05 |
-4.05 |
~38% |
|
18 |
COCOA AND COCOA PREPARATIONS. |
0.01 |
35.19 |
~38% |
|
19 |
PREPARATIONS OF CEREALS, FLOUR, STARCH OR MILK; PASTRYCOOKS PRODUCTS. |
0.00 |
-9.02 |
~38% |
|
20 |
PREPARATIONS OF VEGETABLES, FRUIT, NUTS OR OTHER PARTS OF PLANTS. |
0.05 |
3.67 |
~38% |
|
21 |
MISCELLANEOUS EDIBLE PREPARATIONS. |
0.07 |
-3.19 |
~38% |
|
22 |
BEVERAGES, SPIRITS AND VINEGAR. |
0.99 |
55.35 |
~38% |
|
23 |
RESIDUES AND WASTE FROM THE FOOD INDUSTRIES; PREPARED ANIMAL FODER. |
0.12 |
46.98 |
~38% |
|
27 |
MINERAL FUELS, MINERAL OILS AND PRODUCTS OF THEIR DISTILLATION; BITUMINOUS SUBSTANCES; MINERAL WAXES. |
31.40 |
10.67 |
0% |
|
28 |
INORGANIC CHEMICALS; ORGANIC OR INORGANIC COMPOUNDS OF PRECIOUS METALS, OF RARE-EARTH METALS, OR RADI. ELEM. OR OF ISOTOPES. |
0.70 |
-10.77 |
~9.7% |
|
29 |
ORGANIC CHEMICALS |
3.00 |
-6.68 |
~9.7% |
|
30 |
PHARMACEUTICAL PRODUCTS |
0.87 |
0.92 |
~9.7% |
|
38 |
MISCELLANEOUS CHEMICAL PRODUCTS. |
2.62 |
3.92 |
28% to over 40%, 0 to 2.5% |
|
39 |
PLASTIC AND ARTICLES THEREOF. |
3.35 |
-6.21 |
~10% |
|
40 |
RUBBER AND ARTICLES THEREOF. |
0.62 |
4.51 |
~10% |
|
47 |
PULP OF WOOD OR OF OTHER FIBROUS CELLULOSIC MATERIAL; WASTE AND SCRAP OF PAPER OR PAPERBOARD. |
1.59 |
3.24 |
12 to 18% |
|
48 |
PAPER AND PAPERBOARD; ARTICLES OF PAPER PULP, OF PAPER OR OF PAPERBOARD. |
0.50 |
-3.38 |
12 to 30% |
|
52 |
COTTON. |
0.51 |
5.90 |
~10% |
|
54 |
MAN-MADE FILAMENTS. |
0.06 |
-4.51 |
~10% |
|
55 |
MAN-MADE STAPLE FIBRES. |
0.13 |
0.29 |
~10% |
|
58 |
SPECIAL WOVEN FABRICS; TUFTED TEXTILE FABRICS; LACE; TAPESTRIES; TRIMMINGS; EMBROIDERY. |
0.00 |
17.82 |
~10% |
|
59 |
IMPREGNATED, COATED, COVERED OR LAMINATED TEXTILE FABRICS; TEXTILE ARTICLES OF A KIND SUITABLE FOR INDUSTRIAL USE. |
0.05 |
-0.70 |
~10% |
|
61 |
ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNITTED OR CORCHETED. |
0.01 |
-4.39 |
~10% |
|
62 |
ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT KNITTED OR CROCHETED. |
0.02 |
-2.42 |
~10% |
|
71 |
NATURAL OR CULTURED PEARLS,PRECIOUS OR SEMIPRECIOUS STONES, PRE.METALS,CLAD WITH PRE.METAL AND ARTCLS THEREOF;IMIT.JEWLRY;COIN. |
11.63 |
2.95 |
~15% |
|
72 |
IRON AND STEEL |
1.83 |
-19.84 |
~4.5% |
|
73 |
ARTICLES OF IRON OR STEEL |
0.67 |
7.09 |
~4.5% |
|
74 |
COPPER AND ARTICLES THEREOF. |
0.70 |
34.36 |
~20–25% |
|
75 |
NICKEL AND ARTICLES THEREOF. |
0.24 |
-13.57 |
~20–25% |
|
76 |
ALUMINIUM AND ARTICLES THEREOF. |
1.99 |
-5.61 |
~27–31% |
|
84 |
NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF. |
9.69 |
18.07 |
6.6–7.6% |
|
85 |
ELECTRICAL MACHINERY AND EQUIPMENT AND PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS,AND PARTS. |
7.41 |
42.06 |
6.6–7.6% |
|
87 |
VEHICLES OTHER THAN RAILWAY OR TRAMWAY ROLLING STOCK, AND PARTS AND ACCESSORIES THEREOF. |
1.30 |
-0.55 |
~24% |
|
88 |
AIRCRAFT, SPACECRAFT, AND PARTS THEREOF. |
3.65 |
-26.16 |
~8–21%, |
|
89 |
SHIPS, BOATS AND FLOATING STRUCTURES. |
2.25 |
1,568.41 |
~16% |
|
90 |
OPTICAL, PHOTOGRAPHIC CINEMATOGRAPHIC MEASURING, CHECKING PRECISION, MEDICAL OR SURGICAL INST. AND APPARATUS PARTS AND ACCESSORIES THEREOF; |
4.45 |
4.50 |
~12–40%, |
|
Total imports share and growth |
100 |
8.29 |
||
|
Total imports of India from US (in US $ million) |
45694.74 |
Source:Import Data(DOC),Tariff data(Various Sources)
The 28 items on which Retaliatory tariffs were levied on the US by India in 2019 are also given in table 2. These items are basically agricultural and related items, iron and steel items and chemicals. The additional tariffs were later withdrawn.
Table 2: Retaliatory Tariff by India on Imports from the USA in 2019
|
6HS Code |
Commodity |
Additional Tariff in 2019 (%) |
Imports in 2018 (US$ mn) |
Simple MFN tariffs in 2018 (%) |
|
071320 |
Chickpeas(Garbanzos)Dried and Shelled |
10 |
14.2 |
53.3 |
|
071340 |
Lentils(Mosur) Dried and Shelled |
20 |
3.7 |
30.0 |
|
080211 |
Almonds Fresh or Dried in Shell |
17 |
824.4 |
10.3 |
|
080212 |
Shelled Almonds Fresh or Dried |
20 |
15.8 |
13.7 |
|
080231 |
Walnuts Fresh or Dried in Shell |
20 |
36.3 |
30.0 |
|
080810 |
Apples Fresh |
20 |
203.6 |
50.0 |
|
280920 |
Phosphoric Acid |
5 |
180.7 |
6.3 |
|
281000 |
Boric Acid |
20 |
1.5 |
7.5 |
|
382200 |
Others- Diagnostic Reagents |
20 |
193.0 |
10.0 |
|
382499 |
Others- Binders for Foundry Moulds |
10 |
104.6 |
7.5 |
|
721012* |
OTS/MR Type – Flat Rolled products of thickness >600mm |
15 |
19.1 |
12.5 |
|
721012* |
Other Plates, Sheets, Strips |
15 |
|
|
|
721912 |
HT-Rlld Products in Coils of Thickness >=4.75mm |
15 |
13.5 |
7.5 |
|
721913 |
HT-Rlld Products in Coils of Thickness>=3mm Bt <4.75mm |
15 |
1.8 |
7.5 |
|
721921 |
Other Nickle Chrm Austntc Type |
15 |
3.1 |
7.5 |
|
721990 |
Other Sheets and Plates NES |
15 |
6.8 |
7.5 |
|
722511 |
FLT – RLD Prdcts of Silicon Elctrcl Stl Grain oriented |
15 |
26.0 |
10.0 |
|
730729 |
Other Fittings of Stainless Steel |
15 |
16.9 |
10.0 |
|
730799 |
Non Galvanized |
15 |
14.5 |
10.0 |
|
730890 |
Other Structure and parts of Iron and Steel |
15 |
9.1 |
10.0 |
|
731029 |
Other Tanks and Drums etc |
15 |
14.9 |
10.0 |
|
731815 |
Other Screws and bolts W/N with nuts |
15 |
31.7 |
10.0 |
|
731816 |
Threaded Nuts |
15 |
11.7 |
10.0 |
|
731829 |
Other Non Threaded Articles NES |
15 |
21.0 |
10.0 |
|
732090 |
Others of other Springs of Iron/Steel |
15 |
10.6 |
10.0 |
|
732599 |
Other Cast Articles of Iron/Steel NES |
15 |
6.2 |
10.0 |
|
732619 |
Articles of Forged or Stamped but not further worked |
15 |
10.1 |
10.0 |
|
732690 |
All other articles of Iron/Steel |
15 |
116.2 |
10.0 |
|
|
Total of 28 Items |
|
1910.9 |
|
|
|
Total of all |
|
38805.1 |
|
Source: Calculated using DoR Press Release and WITS data
Note: *Both items merged in single code at 6HS level
With new irrational reasons, punitive tariffs have been imposed on India by the US. In case the bonhomie between India-Russia-China, the emphasis of India on Atmanirbhar Bharat , reduction of India’s foreign exchange exposure to the dollar and the strengthening of BRICS fail to have some salutary effects on the US Government’s thinking, then India may first think of some relatively less hard trade related measures like retaliatory tariffs particularly on items in table 2 for which retaliatory tariffs were levied by India in 2019 and later withdrawn.
If the rant against India by the US Government authorities does not stop or if a second phase of tariffs are levied or non-tariff measures or visa related measures are adopted by the US, then there are more harder options for India also related to Bilateral Balance of Payments. Even the high farm subsidies given by the US on many agricultural items can be imputed to the tariff calculations while imposing retaliatory tariffs by India. However trade negotiations to arrive at sensible tariffs is still the first best option.
