US calls India ‘Tariff King’ even as its own agricultural tariffs cross 300%

India faces new trade restrictions after US President Donald Trump announced a 25 per cent tariff on a range of Indian exports on July 30, citing what he described as “obnoxious” trade barriers and New Delhi’s defence ties with Moscow. The tariffs, effective August 1, cover auto parts, electronics, jewellery, textiles and select processed foods.

The move follows Trump’s renewed use of the term “Tariff King” to describe India. Over the past year, he has repeatedly accused India of maintaining “the highest tariffs in the world” and erecting non-tariff barriers to American goods. The issue has been a recurring point of friction in bilateral trade negotiations.

Data from the World Trade Organisation (WTO), however, shows a more complex picture. While India’s average applied MFN tariff stood at 15.9 per cent in 2024 compared to 3.4 per cent for the United States, the bound rates filed by the US allow for much higher ceilings in certain agricultural categories. According to the WTO’s 2024 Tariff Profiles and US Trade Representative filings, the US can legally impose up to 350 per cent duties on some tobacco products, over 200 per cent on specific dairy items such as milk powders and cheeses, more than 130 per cent on selected fruits, vegetables, cereals and processed foods.

These rates are typically triggered when imports exceed quota limits or originate from countries without trade preference agreements, a situation that affects many developing-country exporters.

Preliminary estimates by Indian think tanks NCAER and ICRIER suggest the new US tariffs could reduce India’s GDP growth by 0.2 to 0.5 percentage points in the next fiscal if maintained. The impact is expected to be concentrated in labour-intensive export sectors such as textiles and gems, where margins are already under pressure.

In 2024, the US imported goods worth $87.4 billion from India and exported $41.7 billion, resulting in a $45.7 billion trade deficit, according to the US Census Bureau. While India’s trade surplus reflects its growing role in global supply chains, access to the American agricultural market remains limited, with high tariff peaks acting as a barrier despite ongoing negotiations.