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India cannot be called a tariff abuser, as done by former US President Donald Trump recently, as its average tariff rate is comparable to other major economies like South Korea and China, and such an accusation is unfair, according to research body Global Trade and Research Initiative (GTRI).
Moreover, it is not just India that has particularly high tariffs for some items such as alcohol and automobiles. Several other countries have the same, including the US, which has peak tariffs in items like dairy, fruits and vegetables clothing, beverages and tobacco, a paper compiled by GTRI pointed out.
“India has already removed tariffs on most imports from its FTA (free trade agreement) partners like the ASEAN, Japan, and South Korea, showing its openness to free trade. However, despite India’s willingness, the US has been reluctant to reduce tariffs through FTAs. This hesitation is clear in the Indo-Pacific Economic Framework, where no tariff cuts were included, reflecting the US’s cautious approach,” according to Ajay Srivastava, trade expert and GTRI founder.
The highest tariffs of Japan is 457 per cent , Korea is 887 per cent, the US is 350 per cent, while that in India is 150 per cent. “So India is not alone,” it said.
IMPORT TARIFFS
Earlier this week, Trump called India an abuser of import tariffs while campaigning in Michigan for the upcoming US Presidential elections.
The Republican Presidential candidate had criticised India for its high tariffs several times during his Presidency. In October 2020, he made a statement labelling India the “tariff king.”
The US’ peak tariffs include those on dairy products (188 per cent), fruits and vegetables (132 per cent), coffee, tea, cocoa and spices (53 per cent), cereals and food preparations (193 per cent), oilseeds, fats and oils (164 per cent), beverages and tobacco (150 per cent), fish and fish products (35 per cent), minerals and metals (187 per cent), chemicals (56 per cent), textiles (25 per cent), clothing (135 per cent), rubber, leather and footwear (60 per cent), and transport equipment (50 per cent), the report pointed out.
While India’s average tariff rate of 17 per cent is higher than the US’s 3.3 per cent, it is comparable to other major economies like South Korea (13.4 per cent) and China (7.5 per cent). For industrial products, which make up the majority of India’s imports, the average tariff is lower at 13.5 per cent, with the trade-weighted average being just 9 per cent, it added.
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