India’s Finances has 2 messages for Trump: We’re not a high-tariff nation, we hear your concern

With the rationalisation of tariffs, Union Finance Minister Nirmala Sitharaman had two key messages for US President Donald Trump within the Finances 2025-26.

One, Sitharaman signalled that India was now not a high-tariff nation.

Two, Sitharaman conveyed to the Trump adminsitration that India is conscious of US issues and is keen to deal with them.

Within the
Finances 2025-26, Sitharaman proposed to take away seven tariff charges, which might imply that solely eight charges would stay. She additional proposed to make sure that just one cess or surcharge to be imposed and went on to suggest the exemption of Social Welfare Surcharge on 82 tariff strains which can be topic to a cess.

For years,
Trump has complained that the world has been buying and selling unfairly with the USA. He has complained that whereas different nations export freely to the USA, they don’t freely import US items. To deal with this purported unfair therapy, he has resorted to imposing tariffs on different nations — he has already imposed 25 per cent tariffs on Canada and Mexico and 10 per cent on China and has mentioned that tariffs on the European Union (EU) are within the making.

Beforehand,
Trump has declared India as a “huge abuser” amongst such purported unfair buying and selling companions and has threatened Brics nations —India is a founding member of Brics— with 100 per cent tariffs.

Despite the fact that the Narendra Modi authorities has largely maintained that the discount of tariffs within the Finances 2025-26 was in step with earlier budgets the place comparable reductions have been made, there are indications that the choice was additionally meant as a sign to the USA. In remarks after the Finances was introduced, Sanjay Agarwal, the Chairman of Central Board of Oblique Taxes and Customs (CBIC), mentioned that the rationalisation will assist enhance commerce perceptions about India.

“One main achievement of this train is that we modified the optics that India is a really high-tariff nation,” Agarwal advised The Financial Instances.

Agarwal mentioned that the majority US items now have low tariffs. He mentioned that prime 30 US items have tariffs lower than 10 per cent.

Amongst such items, Agarwal listed crude, which attracts a tariff of Re 1 per metric tonne, coal (2.5 per cent), petrochemical objects (7.5 per cent), diamonds (5 per cent), and industrial diamonds (0 per cent).

Implying that India by no means imposed heavy tariffs on US items, Agarwal mentioned only one or two cases, such because the tariff of fifty per cent 1,600 cc-plus motorbikes, had led to such an impression. Agarwal mentioned that the tariff has now been decreased to 40 per cent. He additional mentioned that the tariff on semi-knocked down (SKD) kits has been decreased to twenty per cent from 25 per cent and to 10 per cent from 15 per cent for fully knocked down (CKD) models.

Whilst Trump has threatened Brics and has introduced tariifs for the EU, there are indications that the Modi authorities is just not involved about tariffs as of now.

The Hindustan Instances reported that “at this second, there’s completely no risk of any tariff measures”.

An official advised the newspaper that the current tweaks in tariffs usually are not triggered by any risk from Trump “as a result of there isn’t any trigger for such an motion”.

“A choice to streamline and rationalise customs responsibility construction have been taken in earlier two budgets and the transfer on this funds needs to be seen in continuation to that,” mentioned this official.