Sitharaman Signals Possible Rollback Of Tariffs, Stressing Protection For Domestic Industry

Sitharaman further clarified that India’s decision to raise import duties is not aimed at "controlling imports." "Each tariff we have imposed can be explained," she added

Amid US President-elect Donald Trump's criticism of India as the "biggest" importer of tariffs, Finance Minister Nirmala Sitharaman said on Tuesday that she may consider rolling back increased tariffs on products that do not harm the domestic industry.

"I will lift tariffs on these items, provided it doesn't, either intentionally or unintentionally, hurt our domestic production capacity. I need to strike a balance between the two," she said at an event organised by the Republic Media Network.

Sitharaman emphasised her responsibility to protect local industries while also balancing the needs of sectors dependent on imports.

Trump has frequently criticised India for its high tariffs, calling the country the "tariff king" in 2020. More recently, he referred to India as the "biggest charger" of tariffs on foreign goods and an "abuser" of import taxes. He also warned that the US would impose reciprocal tariffs if he is re-elected.

Sitharaman further clarified that India’s decision to raise import duties is not aimed at "controlling imports." "Each tariff we have imposed can be explained," she added.

India's trade relationship with the US is critical, as the US is not only India's largest trade partner and export destination but also its fourth-largest source of imported goods.

Sitharaman further emphasised that India's decision to increase import duties is not aimed at "controlling imports." "It is possible to explain every tariff that we have levied," she added.

India's trade ties with the US are vital, as the US is India's largest trade partner and the primary destination for its exports. Additionally, it is India's fourth-largest importer.

Trade between India and the US has remained strong and continues to grow. In the financial year 2023-24, bilateral merchandise trade reached nearly $120 billion, with India maintaining a trade surplus of $35.3 billion. Overall, bilateral trade in goods and services totalled $190.1 billion in 2023. 

In terms of investment, the US was the third-largest source of foreign direct investment (FDI) into India in FY24, with inflows of $4.99 billion, making up nearly 9 per cent of total FDI equity inflows.