Global Trade Research Initiative (GTRI) says Trump’s claim about India’s high tariffs is misleading, points to U.S.’s protective trade measures
India is not misusing tariffs as alleged by former U.S. President Donald Trump. The Global Trade Research Initiative (GTRI) has challenged Trump’s recent statement, explaining that while India does impose higher tariffs on certain products, so do many other countries, including the United States. According to GTRI, Trump’s accusations fail to consider the broader global context where protective duties are a standard practice to shield domestic industries.
Trump’s Claims Misleading: India’s Tariff Policies Explained
Trump recently called India the “king of tariffs,” repeating claims he made back in 2020. He accused India of abusing import duties to the disadvantage of U.S. goods. However, GTRI points out that this statement selectively focuses on products where India applies higher tariffs, ignoring the fact that countries like the U.S. also protect their industries with significant import duties.
According to the World Tariff Profile 2023, the U.S. itself imposes high tariffs on several items. For instance, U.S. duties on dairy products reach up to 188%, while fruits and vegetables see tariffs as high as 132%. Other U.S. tariffs include 193% on cereals, 150% on beverages and tobacco, and 164% on oilseeds. These figures suggest that the U.S. also uses tariffs to protect certain segments of its economy, just like India does.
India’s Tariff Rates in Context: High on Some Products but Not Unusual Globally
GTRI acknowledges that India imposes high duties on select items like alcohol and motor vehicles. Tariffs on whiskey and wine, for example, are set at 150%, and motor vehicles face duties between 100% and 125%. However, GTRI emphasizes that such high tariffs are not unique to India. Countries like Japan, South Korea, and the U.S. also apply similar or even higher tariffs on specific goods.
For example, Japan imposes a staggering 457% duty on certain goods, while South Korea’s tariff on specific products reaches as high as 887%. In comparison, India’s duties seem far from extreme, given that many countries use similar trade practices to protect local industries.
India’s Average Duty Rate Matches Global Standards
While Trump highlights India’s higher duties on select products, GTRI argues that his claims are not entirely accurate. India’s average duty rate is 17%, which is higher than the U.S. average of 3.3%. However, when compared to other large economies, India’s tariffs are relatively standard. For instance, South Korea has an average duty rate of 13.4%, and China imposes a 7.5% duty. These figures show that India’s average tariffs are in line with other major economies.
Moreover, India has shown openness to free trade through Free Trade Agreements (FTAs). GTRI points out that India has removed duties on imports from FTA partners like ASEAN, Japan, and South Korea. This demonstrates that India’s trade policy is not about isolating its economy with high tariffs but rather about balancing domestic protection with international trade partnerships.
High Tariffs Not Unique to India: Global Context is Important
Trump’s focus on individual high tariffs ignores the fact that many countries, including the U.S., apply similar measures. In one instance, Trump pointed out in 2019 that India levied a 150% duty on American whiskey. While this is true, the GTRI report clarifies that India is not alone in imposing such duties. Countries like the U.S., Japan, and South Korea apply even higher tariffs on certain products to protect their domestic markets.
Japan, for instance, protects its rice farmers with a 457% tariff, while the U.S. imposes high duties on tobacco products to safeguard its agricultural sector. Similarly, India’s high tariffs on alcohol aim to protect its growing liquor industry. GTRI argues that such protective measures are standard global practices, and singling out India is unfair.
GTRI: Average Tariffs Provide Better Picture of India’s Trade Policies
Ajay Srivastava, the founder of GTRI, said that while India does apply higher tariffs on certain goods, the average duty rate provides a better understanding of its overall trade policy. Most countries impose high tariffs on select goods to protect vital industries, but these do not represent the actual trade landscape. Srivastava emphasizes that it’s essential to look at average duty rates and trade-weighted tariffs to get a more accurate picture of how India manages its trade policies.
In summary, the GTRI report explains that Trump’s claims about India’s tariff abuse are misleading and do not account for the common practice of using tariffs to protect domestic industries across the world. India’s trade policies, while protective in some areas, are comparable to those of other major economies and reflect a balance between protecting local industries and engaging in global trade.
