India Faces US Tariff Hike, But 'Better Placed Than Others': FIEO

New 26% US Tariff on India to Impact Exporters, FIEO Urges Swift Trade Agreement​

New Delhi, April 3 — The Federation of Indian Export Organisations (FIEO), India's apex export body, has cautioned that the newly announced 26% import tariffs by the United States will pose challenges for domestic exporters. However, the organisation noted that India remains relatively better positioned compared to several other major economies facing higher duties.

Speaking on Thursday, FIEO Director General and CEO Ajay Sahai acknowledged the likely repercussions of the US decision but emphasised India’s comparatively advantageous standing. "We will definitely be affected by the tariffs, but we are much better placed than many others," Sahai said, citing key competitors like Vietnam, China, Indonesia, and Myanmar.

Hope Rests on Bilateral Trade Pact​

Sahai expressed optimism over the ongoing negotiations for a Bilateral Trade Agreement (BTA) between India and the US. A swift conclusion to the agreement, he said, would help soften the blow of the reciprocal tariffs.

“We have to assess the impact, but looking at the reciprocal tariffs imposed on other countries, we are in a lower band. We are much better placed compared to our key competitors,” Sahai added.

Trump’s Justification: ‘India Not Treating Us Right’​

US President Donald Trump, while announcing the tariffs, criticised the high import duties India imposes on American goods. Referring to India as “very, very tough,” Trump held up a chart detailing the tariff disparities, claiming India imposed 56% tariffs, which include alleged currency manipulation and trade barriers.

“India, very, very tough. The Prime Minister just left. He’s a great friend of mine, but I said, ‘You’re a friend of mine, but you’re not treating us right,’” Trump said. He went on to justify the 26% ‘discounted reciprocal tariff’ as a corrective measure against these imbalances.

Trade Snapshot: India-US Economic Ties​

From 2021-22 to 2023-24, the United States remained India’s largest trading partner. The bilateral trade figures for 2023-24 reveal a USD 35.32 billion trade surplus in India’s favour — an increase from USD 27.7 billion in 2022-23 and USD 32.85 billion in 2021-22.

The US accounted for:

• 18% of India’s total goods exports
• 6.22% of India’s imports
• 10.73% of total bilateral trade

Major Indian Exports to the US (2024):​

• Drug formulations & biologicals – USD 8.1 billion
• Telecom instruments – USD 6.5 billion
• Precious & semi-precious stones – USD 5.3 billion
• Petroleum products – USD 4.1 billion
• Jewellery – USD 3.2 billion
• Ready-made garments (cotton) – USD 2.8 billion
• Iron & steel products – USD 2.7 billion

Major Indian Imports from the US (2024):​

• Crude oil – USD 4.5 billion
• Petroleum products – USD 3.6 billion
• Coal, coke – USD 3.4 billion
• Cut & polished diamonds – USD 2.6 billion
• Electric machinery – USD 1.4 billion
• Aircraft, spacecraft & parts – USD 1.3 billion
• Gold – USD 1.3 billion

As the tariff hike raises concerns across India's export sectors, trade experts and policymakers alike are looking to fast-track the proposed BTA to restore trade balance and ensure continued growth in Indo-US commercial ties.