India increases tariffs on 28 US goods in latest Trump trade dispute
India slaps higher retaliatory tariffs on US goods after the US ends a trade privilege for India.
India recently increased tariffs on 28 US goods. According to the World Trade Organisation, India could be placing $241 million worth of tariffs on US products.
US-India trade impasse details
India is raising tariffs on US goods in response to US President, Donald Trump, ending trade privileges for the Asian nation under the Generalised System of Preferences [GSP]. India was the biggest beneficiary of that system meant to boost trade. The system allowed duty-free exports of up to $5.6 billion from India to the US.
The US Trade Representative’s office agreed with Trump that India didn’t meet the criteria to continue to benefit from the GSP.
‘India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion,’ said the US Trade Representative’s office.
India retaliated by increasing tariffs on mostly agricultural products and some chemicals. US apples will be hit with a 70% tariff.
How will tariffs affect US-India relations?
The US is already locked in a trade war with China. Now this latest tariff dispute could impact trade relations with Asia’s second largest nation. Rajat Kathuria, director of the Indian Council for Research on International Economic Relations, said India is asserting its strength with increased tariffs against the US.
‘I think it's [the tariff action] a signal that is going out from India that we are going to act, if not tough, we're going to be firm in our response,’ said Kathuria.
Siddhartha Khemka, head of retail research at Motilal Oswal Securities, says that the increased tariffs could worsen trade relations between India and the US.
‘India putting retaliatory tariffs on [the] US is leading to a fear that it might escalate into a trade war between the two countries,’ said Khemka.
Mike Pompeo, US Secretary of State, and Subrahmanyam Jaishankar, Minister of External Affairs in the Government of India, are scheduled to meet later this month. Manym will be watching the meeting to see if this latest trade impasse can be resolved.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Be ready to act on ECB opportunities
Learn how the ECB’s monetary policy announcements affect interest rates and price stability ahead of its next meeting in 30 January 2025.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
