India’s high tariffs lock out imports, says Donald Trump’s economic adviser

US President Donald Trump’s economic adviser believes India has high tariffs that significantly restrict imports. Indian Prime Minister Narendra Modi is set to meet with Trump in Washington, where discussions are expected to focus on tariff adjustments. This meeting comes amid US concerns over India's high tariff rates. 

According to a report in Reuters, Trump's economic adviser Kevin Hassett highlighted that India has high tariffs that lock out imports. Hassett said that Trump believes the United States should impose reciprocal tariffs that are at least equal to those imposed by other countries. "Almost every trading partner has much higher tariffs than we do," Hassett noted, emphasising the need for balanced trade relations. 

As per data from the World Trade Organisation, India's simple average tariff rate stands at 17 per cent, compared to the US's 3.3 per cent.

In response, India is contemplating further tariff reductions in at least a dozen sectors, including electronics, medical equipment, and chemicals. This move seeks to facilitate increased US exports to India and mitigate potential trade tensions. Modi's government is also considering increased imports of US energy products, potentially exceeding $11 billion in the first eleven months of 2024, as part of efforts to address trade imbalances.

Trump had labelled India a "very big abuser" in trade, urging the country to purchase more US-made security equipment to establish a fairer bilateral trade relationship. 

"If they go down, we'll go down," Hassett stated, indicating Trump's willingness to reduce US tariffs if other nations follow suit. The US's strategy also involves stopping waivers on steel and aluminium tariffs to boost domestic production. 

Moreover, India recently reduced its average import tariff rates from 13 per cent to 11 per cent on various items, as announced in the Union Budget 2025. Additionally, taxes on luxury items such as high-end motorcycles and cars have been lowered. The Indian government is also reassessing surcharges on over 30 items, including luxury vehicles and solar cells, as part of broader economic reforms aimed at fostering a more balanced trade environment with the US.