Donald Trump to Impose Reciprocal Tariffs on India: Will $35Bn Trade Surplus Survive?

United States President Donald Trump vowed to impose reciprocal tariffs on America's many trading partners, including India, from April 2 onwards. During the first address of his second term in a joint session of the Congress, Trump defended his move as necessary to address "unfair trade practices" by US counterparts.

“If you don’t make your product in America under the Trump administration, you will pay a tariff, and in some cases, a rather large one. Other countries have used tariffs against us for decades and now it's our turn to start using them against those other countries,” Trump declared before a packed House of Representatives.

“India charges us tariffs, 100%. The system is not fair to the US, it never was,” he emphasised.

The US President, reaffirming his "America First" agenda, vowed to impose the same taxes on trading partners that they levy on the US.

Trump's new tariffs will target a wide range of imports from key trading partner countries including Canada, Mexico, China, the European Union and India as a part of his push to overhaul US trade policies.

Trump's announcements, since assuming charge for a second terms, have been sending shockwaves globally with some of the countries already imposing retaliatory measures including Canada, Mexico and China.

Impact on India

Reciprocal tariffs from the US could hurt India-US bilateral trade relations, which have grown significantly over the last ten years. It will also dampen India's trade surplus status with the US.

India's strong export portfolio in sectors like electronics, pharmaceuticals and textiles could be vulnerable to reciprocal tariff measures as well.

India’s goods trade surplus with the US has doubled to $35bn. It accounted for nearly 1% of India’s gross domestic product (GDP) for the fiscal year 2024.