India’s Import Duties on American Goods Remain a Challenge, says 2025 USTR Report
India continues to impose "high" tariffs and significant non-tariff barriers on various American goods, including agricultural products, drug formulations, and alcoholic beverages, according to the latest report from the United States Trade Representative (USTR).
Released on March 31, 2025, a day ahead of the announcement of reciprocal tariffs, the annual National Trade Estimate (NTE) Report identifies key trade practices and regulatory hurdles that impact US exports, investments, and digital trade.
Persistently High Tariffs on Agriculture and Manufactured Products
According to the report, India’s applied tariff rates remain notably high across multiple sectors. Key American exports impacted include vegetable oils (up to 45%), apples, corn, and motorcycles (50%), automobiles and flowers (60%), natural rubber (70%), coffee, raisins, and walnuts (100%), and alcoholic beverages (up to 150%).
Additionally, India imposes "very high" basic customs duties on critical drug formulations, including essential medicines identified by the World Health Organization (WHO).
"High tariff rates present a significant barrier to trade in other agricultural and processed foods, including poultry, potatoes, almonds, apples, grapes, canned peaches, chocolate, cookies, frozen fries, and various fast-food ingredients," the report emphasizes.
India’s bound tariff rates at the World Trade Organization (WTO) rank among the highest globally, averaging 113.1% and reaching as high as 300%. The considerable gap between WTO-bound rates and applied tariffs grants India significant flexibility to alter rates unpredictably, creating uncertainty for US exporters, farmers, and businesses.
Complex Non-Tariff Barriers Further Impede Market Access
Beyond tariffs, the report highlights numerous non-tariff barriers maintained by India, including import bans, licensing requirements, mandatory Quality Control Orders (QCOs), price controls on medical devices, customs hurdles, and stringent domestic testing and certification obligations.
"Tariff rates are often announced in India's annual budget but are frequently modified through ad hoc notifications without stakeholder input. Additionally, numerous exemptions based on product use, user, and export promotion programs further complicate trade," the report explains.
Dairy Market Remains Restricted to US Exporters
The US has repeatedly raised concerns regarding India's restrictive dairy import policies. The USTR report notes specific challenges such as stringent certification requirements ensuring that dairy products originate from animals that have not consumed feeds derived from internal organs, blood meal, or tissues of ruminant or porcine origin.
Combined with recent dairy health certificates, new facility registrations, and steep tariffs, these conditions significantly restrict market access for US dairy products into one of the world's largest dairy markets.
Intellectual Property Rights Enforcement Remains Problematic
The report criticizes India’s Intellectual Property (IP) environment, citing concerns about patent revocations and subjective application of patentability criteria under the Indian Patents Act. It notes that such uncertainties negatively impact perceptions of India's investment climate, innovation objectives, and IP regime, adding that "India’s overall IP enforcement remains inadequate."
Services and Digital Trade Face Multiple Restrictions
Foreign investments in key Indian service sectors, such as financial services and retail, encounter restrictions on foreign equity, while professional services remain substantially limited. Digital trade and e-commerce are also affected by barriers, including restrictive policies impacting electronic payment providers, compliance obligations, and content takedown protocols.
Since 2021, US companies have reported increased takedown requests for content and user accounts, some seemingly politically motivated, the report claims. It further points to India’s frequent localized internet shutdowns as disruptions negatively affecting commercial operations, access to information, and overall trade in the digital economy.
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