May ease tariffs if no harm to economy, says FM Nirmala Sitharaman

Amid United States (US) President-elect Donald Trump calling India the ‘biggest’ import tariff charger, Finance Minister Nirmala Sitharaman on Tuesday said she may roll back the increased tariffs on products that do not harm the domestic industry.

 

“I will lift tariffs on them provided it doesn’t, intended or unintended, hurt my own capacity to produce. I will have to balance the two,” she said at an event hosted by Republic Media Network.

 

According to Sitharaman, she has the responsibility to protect existing domestic companies producing goods locally, while balancing the needs of those dependent on imports.

 

Trump has repeatedly criticised India, calling it a high-tariff nation. In 2020, he referred to India as the ‘tariff king’. More recently, he described India as the ‘biggest charger’ of tariffs on foreign goods and an ‘abuser’ of import tariffs. He also stated that the US would impose reciprocal taxes if he is re-elected.

 

Sitharaman further said that India’s decision to raise import duties is not intended to ‘control imports’. “It is possible to explain every tariff that we have levied,” she added.

 

India’s trade relationship with the US is crucial, as the US is India’s largest trade partner and export destination. It is also India’s fourth-largest source of imported goods.

 

Trade between the two countries has been robust and continues to grow. During the financial year 2023-24, the size of bilateral merchandise trade stood at nearly $120 billion. The trade balance has been in favour of India, with a surplus of $35.3 billion.

 

Overall bilateral trade in goods and services reached $190.1 billion for the calendar year 2023. As for investment, during FY24, the US was the third-largest source of foreign direct investment (FDI) into India, with inflows worth $4.99 billion, accounting for almost 9 per cent of total FDI equity inflows.