India's tariffs compliant with global standards: Economic Think Tank | Fusion - WeRIndia

India’s import duties align with global trade regulations, and the Indian government should make this clear to the US administration, according to the Global Trade Research Initiative (GTRI).

The think tank also highlighted that negotiating a comprehensive free trade agreement (FTA) with the United States poses significant challenges.

The US may pressure India to make concessions on various fronts. These include opening up government procurement to American companies, reducing subsidies in agriculture, relaxing patent laws to allow evergreening, and removing restrictions on data flows.

However, India has firmly resisted such demands for decades and is unlikely to agree to these terms in the near future.

US President Donald Trump has frequently criticized India’s import duties, referring to the country as the “tariff king” and accusing it of being a “tariff abuser.”

Despite these accusations, GTRI’s founder, Ajay Srivastava, pointed out that India’s tariffs comply with the rules set by the World Trade Organization (WTO).

These tariffs, he explained, are in line with the agreements made by all WTO member countries back in 1995.

He emphasized that India needs to convey this to the US to dispel any misconceptions.

The WTO, with its 166 member countries, is the global body that oversees international trade rules.

When the organization was established in 1995, developed nations allowed developing countries to maintain higher tariffs in exchange for their commitments to trade-related intellectual property rights, services liberalization, and agricultural regulations that favoured wealthier countries.

Many developing nations, including India, argue that these commitments disproportionately benefit developed nations, restricting their ability to industrialize.

Srivastava also pointed out that Trump’s criticism of India’s tariffs overlooks the fact that India’s exports to the US often have a low local value addition.

For example, products such as iPhones, solar panels, diamonds, and petrochemicals typically have minimal value added within India, which affects the trade balance.

This, he argued, should be considered when evaluating trade relations between the two nations.

The GTRI suggested that India’s best strategy to deal with the US’s high tariff threats could be to offer zero tariffs on most industrial goods to the US or accept the new US tariffs without retaliating.

This approach is similar to the mythological figure Shiva, who consumed poison without swallowing it, allowing India to avoid escalating the conflict.

However, GTRI warned that negotiating a free trade agreement would take time. By the time a deal is made, the US might have already put in place its own tariffs, making the agreement useless.

Because of this, the think tank advised against pursuing this option, saying it is the least favourable choice.

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