On Wednesday, the editor and publisher Merchant called for a significant decrease in the import tariff in India. With the transition to X, he said that reducing customs tariffs is the “largest structural economic reform” that India needs, as it will push local companies to become more competitive without relying on protective barriers.
“Reducing the import tariff is the biggest structural economic engineering needs. It will force Indian companies to be able to compete without protecting duties for foreign products. India must adopt this opportunity rather than being madness around them.”
India has historically imposed high import duties on various commodities to protect local industries, especially in sectors such as electronics, cars and consumer goods. While this approach has supported local companies, it raised the costs of consumers and the limited foreign competition.
The merchant’s statement comes amid continuous discussions on the economic strategy of India and the imminent American definitions. The two countries are moving increasing commercial tensions due to the implementation of mutual definitions by the American administration. President Donald Trump has announced that this tariff aims to address the imbalances in trade relations, especially targeting countries with significant trade surpluses with the United States, including India.
The Trump administration expressed its concerns about the tariff structure in India, describing it as one of the highest among the main economies. The specific problems that are highlighted include complex import requirements and high duties on American products, which the United States view as important commercial barriers. In response, the United States began immediately seized definitions, targeting major Indian exports such as cars and pharmaceutical preparations.
In anticipation of these definitions, India was proactive in searching for solutions to mitigate the potential economic effects. The center considered reducing definitions on more than 30 American products and increasing imports in sectors such as defense and energy. In addition, India has provided identification cuts on imports of American agricultural products as a privilege to avoid imminent definitions.
Analysts have expected that the US tariff could significantly affect Indian exports, with possible declines between $ 2 billion to $ 7 billion in the fiscal year 2025-26. It is expected that the sectors such as engineering goods, pharmaceutical preparations and textiles are among the most affected. The broader economic effects include possible unrest to supply chains and increase the costs of consumers in both countries.