U.S. President Donald Trump announced plans for “reciprocal tariffs” on trading partners, including India, citing high Indian tariffs despite recent reductions on certain goods like motorcycles. India’s Customs revenue accounted for 6.73% of total taxes in 2023-24, higher than most economies. India’s average tariff rose to 12% in 2023, significantly above Brazil and the U.S. Agricultural products saw tariffs between 25% and 50%, reflecting strong protectionism. As India refines its trade policies, balancing competitiveness and collaboration remains vital.
In a recent development, U.S. President Donald Trump announced plans to implement “reciprocal tariffs” on all trading partners, including India, aiming to address America’s long-standing trade deficit in goods. Describing India as “right at the top of the pack” regarding tariffs, Trump pointed to the country’s policies during a joint press conference with Indian Prime Minister Narendra Modi. While acknowledging India’s efforts to reduce duties on motorcycles above 1,600 cc—benefiting Harley Davidson—Trump made it clear that India would also face reciprocal tariffs.
This raises an important question: Are India’s tariff policies significantly higher compared to other nations in global trade?
India’s Customs revenue stood at ₹2.33 trillion in 2023-24, accounting for 6.73% of its total gross central tax collections. The Union Budget for 2025-26 has projected a reduction in this share to 5.62%. Nevertheless, India’s reliance on Customs duties as a proportion of total tax revenue was higher (7.4% in 2022) than many other emerging and advanced economies.
India’s trade-weighted average tariff has seen a rise in recent years. By 2023, this figure reached 12%, with the highest duty imposed being 379%. Comparatively, India’s average tariff rate was about double that of Brazil and six times higher than the United States, which had an average duty of 2.2% in the same year.
The World Tariff Profiles 2024 report highlights that India levied duties between 5% and 10% on 61.1% of non-agricultural products in 2023. For agricultural products, 76.8% were subject to tariffs between 25% and 50%, reflecting India’s strong protectionist stance on agriculture.
Globally, Russia leads in the number of tariff lines, while India followed closely with 12,302 tariff lines in 2023, ahead of countries like the U.S. and Brazil.
As India continues to refine its trade policies, efforts to balance protectionism and competitiveness remain crucial. While the country has taken steps to address tariff concerns, such as reducing duties on specific goods, ongoing dialogue and collaboration with global trading partners could play a key role in fostering mutually beneficial trade relationships.
Charts courtesy Statsguru
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