US Proposes 26% Discounted Tariff on Indian Exports

The United States has announced a groundbreaking 26% discounted tariff on Indian exports, effective April 09, 2025. This strategic move aims to counterbalance higher Indian tariffs on US products, marking a significant shift from traditional product-based tariff adjustments to a country-specific approach.

By Himanshu Tewari

Impact on Global Trade Dynamics

This new tariff policy excludes certain strategic products and introduces differential duty rates, potentially reshaping global supply chains and trade agreements. Countries with larger trade deficits, such as China and Vietnam, face tariffs up to 50%, offering India a comparative advantage in key markets.

India's Strategic Response

India plans a two-pronged strategy to address these changes, focusing on unilateral decisions and bilateral discussions to transition to mutually beneficial product-level tariffs. Businesses are advised to reevaluate their operating models and explore alternative sourcing strategies to mitigate impacts.

Looking Ahead

The evolving tariff landscape underlines the need for agility and strategic planning as the global trade order moves beyond WTO's rule-based framework. The final shape of these tariffs will depend on ongoing negotiations and unilateral adjustments by involved nations.

(The author is Himanshu Tewari, Partner – Trade and Customs, KPMG in India)