US may remove India's 25% penal tariff by November-end: CEA
What's the story
The United States may lift the 25% penal tariff on Indian imports after November 30, Chief Economic Adviser (CEA) V Anantha Nageswaran said. Speaking at a Merchants's Chamber of Commerce and Industry event in Kolkata, Nageswaran said he believes geopolitical factors might have led to this second tariff. However, he is hopeful for a resolution in the coming months as discussions between India and the US continue.
Statement
Tariffs were not anticipated
"Yes, the original reciprocal tariff of 25 percent plus the penal tariff...were both not anticipated." "But considering recent developments in the last couple of weeks...I do believe that, and I have no particular reason to say so; it is my intuition that I do believe the penal tariff will not be there after November 30," he said. He indicated that the reciprocal duty may be reduced to 10-15%.
Economic outlook
$1 trillion export target for India
Last month, the Trump administration raised tariffs on Indian imports to 50%. This included a 25% reciprocal duty and a 25% punitive levy linked to India's Russian oil purchases. The higher duties apply broadly to all Indian products entering or being withdrawn from US warehouses for consumption, although certain categories like iron, steel, aluminum, vehicles, and copper products are exempt from the additional duty.
Tariff exclusions
GTRI report
India's exports to the US are declining as high tariffs imposed by the Trump administration have begun weakening the pricing competitiveness of domestic goods in Washington, think tank Global Trade Research Initiative (GTRI) said. According to GTRI estimates, if the 50% tariffs remain in place until the end of fiscal year 2026, India could lose $30-35 billion in US exports, a significant blow given that the US accounts for approximately 20% of India's goods exports.