Industry hopeful of waiver or deferment of tariffs on some products

Chennai: While the US is putting pressure on India to amend its trade policies to serve American commercial interests, India must firmly assess each demand through the lens of its own national priorities, development goals, and cultural values, find experts. Having engaged with the US in a bilateral trade agreement, the industry expects the US to announce waiver or deferment of reciprocal tariffs for India tomorrow.

“India is the only country constructively engaged in a bilateral trade negotiations with the US and hence the industry expects that the Trump administration will provide India waiver or deferment of tariffs on some products tomorrow,” said Ajay Sahai, director general, FIEO.

Talking about the USTR trade report, he said that India’s high tariffs are in accordance with the WTO commitments. Countries with large number of MSMEs have protective tariffs and such measures are WTO-compliant.

“Many of the changes sought in the report are in areas like agriculture, digital governance, and public health pose serious risks to India’s ability to protect its small farmers, maintain food safety, uphold deeply rooted social norms, and secure its digital future. Any engagement must be fair, reciprocal, and respectful of sovereignty,” finds GTRI.

One key concern for the U.S. is India’s high import duties, especially on farm products. India has already revised duties on products like walnuts, raisins and alcoholic drinks.

India, however, is cautious due to strong public opposition to GM foods and concerns about environmental risks. India’s requirement for non-GM and GM-free certificates for 24 products is seen by the US as unjustified. But India insists it is necessary to maintain traceability and consumer confidence.

Likewise, India’s dairy import restrictions, such as the requirement for animals not to be fed with meat, blood and internal organs of other animals, block US dairy access.

“India sees non-tariff barriers like import bans and licensing rules as well as Quality Control Orders important for protecting health, safety, and the environment,” said Ajay Srivastava, founder, GTRI.

In 2024, India stopped issuing licenses for refurbished US medical devices, affecting exports as relaxing the rules could lead to a flood of second-hand or low-quality products that might harm consumers and hurt local industries.

The US’ concerns about sudden tariff changes, lack of prior notice, and inconsistent customs practices across regions need to be addressed by simplifying the way customs tariffs are notified in complicated language.

Testing of certified telecom and tech products in Indian labs, though repetitive and costly, is important for cybersecurity and supporting local testing facilities. In services, opening up multi-brand retail, digital media, and insurance quickly could threaten small businesses and traditional retailers.

India’s digital trade policies mandate data localization and India defends it as necessary for data sovereignty and security.