FM rebuts US declare of excessive tariffs on imports

Continuing reforms to encourage home value-addition, India on February 1 introduced eradicating seven tariff charges on industrial items within the FY26 finances, leaving solely eight charges in place that embrace the zero responsibility, she mentioned on the Trade Conclave 2025 organised by the Exim Bank in New Delhi.

Referring to the Union finances 2025-26, she mentioned it rationalised customs tariff construction for industrial items and eliminated seven tariff charges. Without any particular reference to the US president, she mentioned: “For all of us, or these of us who nonetheless consider within the commentary which was made within the US that India often is the tariff King. No, I need two issues to be remembered. Given as system of issues we search Parliamentary approval for deciding on the tariff charge. You receive from the Parliament the permission to go as much as a sure degree, however successfully, you might be at a far decrease degree.”

“Effective charge is at a far decrease degree. But what will get revealed within the gazette could be that degree for which you receive permission from the Parliament. And it’s that degree which seems in all places…,” she mentioned, explaining that the levies notified within the gazette are the higher restrict whereas efficient duties are sometimes lower than the cap.

Articulating reforms in customs responsibility construction in her finances speech on February 1, Sitharaman mentioned: “As part of complete assessment of Customs charge construction introduced in July 2024 Budget, I suggest to: (i) take away seven tariff charges. This is over and above the seven tariff charges eliminated within the 2023-24 finances. After this, there will likely be solely eight remaining tariff charges together with ‘zero’ charge.”

An official who didn’t want to be named mentioned customs responsibility rationalisation is without doubt one of the key reforms of the federal government. “Average customs responsibility in India has come all the way down to 10.66%, which is nearer to the charges prevailing in Asian nations. So, the narrative that India’s customs duties are very excessive is fallacious. In reality, many of the American items enter India throughout the efficient customs responsibility band of 0-10%,” he mentioned.

“President Trump’s comment about India will not be new. He used the tag of ‘tariff king’ for India even in his first time period. Since then, India undertook a number of customs reforms and even decreased tariffs on particular objects of American pursuits similar to cars, prescription drugs and Bourbon whisky. Seems, he’s fixated in his opinion,” the official talked about above mentioned. According to a Hindustan Times report from Washington, revealed on October 2, 2018, Trump made his feedback referring to India imposing 100% responsibility on iconic motorbike, Harley-Davidson. Since then, import duties on bikes as much as 1,600 cc and above 1,600 cc have been slashed to 40% and 30%, respectively.

Union finance minister’s feedback got here at a time when India and the US are negotiating an early harvest deal inside a complete Bilateral Trade Agreement (BTA) and talks are primarily centered on lowering tariff and non-tariff obstacles for mutual profit.