March 5, 2025: On his speech in a joint session of the Congress, Trump said he’s all set to make the US “rich again”.  Trump said many countries like India, China, South Korea, and even its neighbouring Canada and Mexico have been charging the US significantly higher on exported goods than what the US charges them which is “totally unfair”. Specifically talking about India, he said, “India charges us auto tariffs higher than 100 per cent.” Similarly, South Korea on average charges 4 per cent higher than what the US charges them and China charges 2 per cent higher.

According to a report by State Bank of India, US tariff rate on Indian goods increased from 2.72 per cent in 2018 to 3.91 per cent in 2021 which slightly decreased to 3.83 per cent in 2022. On the other hand, India’s tariff on the US imports has raised more significantly from 11.59 per cent in 2018 to 15.30 per cent in 2022.

The US remains India’s top destination for exports, accounting for 17.7 per cent of total exports in the FY 2023-24. However, India has been refining its export strategy to not depend on a single market. From exporting raw materials to finished goods, India is evolving in the global market. With growing trade relations with Europe, Middle East and other regions, India is expanding its export markets to not depend on a single market.

The same report by SBI highlights that even if the US imposes higher tariff, overall decline in Indian exports should be around 3 to 3.5 per cent, which should be compensated by higher export goals.

Trump says he has chosen April 2 as the day to implement reciprocal tariff as he didn’t want to coincide it with April fool’s Day. The world waits to witness the changes Trump administration is about to bring in.