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Odisha News, Odisha Breaking News, Odisha Latest News || Ommcom News
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US Calculation Inflates India’s Tariffs On American Goods: Bernstein

OMMCOM NEWS by OMMCOM NEWS
April 3, 2025
in World
Donald Trump

New Delhi: The US estimate of the tariffs imposed by India on American goods is an inflated figure because it includes non-tariff measures such as domestic taxes levied in the country, according to an analysis by leading brokerage Bernstein.

Bernstein’s analysis indicates that the reference tariff rate used by the U.S. results in a 26 per cent tariff on Indian goods, “which is higher than the actual tariff.”

The brokerage pointed out that “US calculation includes non-tariff measures like domestic taxes and currency manipulation, leading to an inflated calculation of tariffs imposed by India on U.S. goods.”

The brokerage notes that the heavy tariffs could have a substantial inflationary impact on the U.S., leading to depressed demand and increased chances of a recession.

However, Bernstein believes that the current tariff measures are likely a starting point for negotiations, and many of these rates may not sustain in the second half of 2025.

For India, the 26 per cent reference tariff calculated by the U.S. is high, but key exports like IT services and pharmaceuticals are exempted.

This provides some relief, as these sectors are crucial for India’s economy.

Bernstein suggests that India could potentially benefit from China’s loss, as tariffs on Chinese goods are even higher.

Interestingly, a USTR report submitted to President Trump and the Congress on April 1 states that “India’s average Most Favoured Nation (MFN) applied tariff rate was 17 per cent.”

It states that “India maintains high applied tariffs on a wide range of goods, including vegetable oils, apples, corn, and motorcycles (50 per cent); automobiles and flowers (60 per cent); and alcoholic beverages (150 per cent).”

The report does not take into account the latest reductions in Indian tariffs that have been announced for US goods in the Budget 2025-26.

The duty on bikes, for instance, has been reduced to 40 per cent while the duty on Bourbon Whiskey has been cut to 100 per cent from 150 per cent earlier.

According to Bernstein, while some nations like China are expected to take retaliatory measures, many are likely to engage in back-channel negotiations to ease the situation.

China, the European Union and Canada on Thursday announced that they would be taking countermeasures against the US tariff hike, giving rise to fears of a trade war breaking out, which would lead to fuelling inflation and stalling growth.

Japan, on the other hand, came up with a more cautious response saying it would hold talks with the US on the issue.

The White House has announced exemptions for certain products, including steel, aluminum, copper, pharmaceuticals, semiconductors, gold, and specific minerals not available in the U.S. However, these exemptions are unlikely to mitigate the long-term risk of a possible recession if the tariffs persist and retaliations occur.

(IANS)

Tags: American goodsIndia’s Tariffstaxes
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