Government should convey to the U.S. that Indian tariffs are WTO-compliant, says think tank GTRI

GTRI mentioned that India’s greatest choices to take care of the U.S.’s risk to impose excessive duties embody providing zero tariffs on most industrial items to the U.S., or absorbing new U.S. tariffs with out retaliation
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India’s import duties are in compliance with international commerce guidelines and the authorities should convey this to the U.S. administration, Global Trade Research Initiative (GTRI), an financial think tank, mentioned on Sunday (March 2, 2025).

It additionally mentioned that negotiating a complete Free Trade Agreement (FTA) with the U.S. presents a number of challenges.

The U.S. might push India to open authorities procurement to American companies, cut back agricultural subsidies, weaken patent protections by permitting evergreening, and take away restrictions on knowledge flows, it mentioned, including India had resisted these calls for for many years and was nonetheless not ready to settle for them.

U.S. President Donald Trump on a number of events has alleged that India had excessive tariffs and termed it “tariff king” and “tariff abuser”.

Tariffs are import duties imposed and picked up by the authorities and paid by firms to deliver international items into the nation.

“India’s tariffs are consistent with WTO (World Trade Organization) rules. They are the result of a single undertaking at the WTO which all countries, including the U.S., approved in 1995…Indian tariffs are WTO compliant. The Indian side needs to explain [this] to the U.S.,” GTRI founder Ajay Srivastava mentioned.

The 166-member discussion board is the solely worldwide physique that offers with the guidelines of commerce between nations.

When the WTO was established in 1995, developed nations agreed to let growing nations retain larger tariffs in alternate for commitments on Trade-Related Aspects of Intellectual Property Rights (TRIPS), providers commerce liberalisation, and agricultural guidelines that primarily favoured wealthier nations.

Mr. Srivastava mentioned many growing nations argue that the commitments made below TRIPS and agriculture had disproportionately benefited developed nations, limiting their capability to industrialise.

“[U.S. President] Trump, while talking about India’s high tariffs, conveniently forgets this,” he added.

He additionally mentioned that India’s exports to America usually have low native worth addition and this should be thought-about when assessing commerce balances between the two nations.

The sectors the place native worth addition in exported items are low embody iPhones, photo voltaic panels, diamonds, and petrochemicals, he mentioned.

The GTRI additional mentioned that India’s greatest choices to take care of the U.S.’s risk to impose excessive duties embody providing zero tariffs on most industrial items to the U.S., or absorbing new U.S. tariffs with out retaliation “much like Shiva consumed poison without swallowing it”.

“FTA negotiations will take time, and by the time an agreement is reached, Trump may have already imposed reciprocal tariffs, making the deal ineffective. On account of these reasons, this option is the worst option, [and is] not advisable,” the GTRI mentioned.