Following US President Donald Trump’s reciprocal tariff of 27% on Indian imports, New Delhi has said that it is carefully analysing the implication of such a measure. In an official press communique, the Department of Commerce said that it is engaging with all stakeholders including members of the Indian industry and exporters to understand their assessment of the situation.

The baseline duty of 10% will be effective from April 05, 2025 and the remaining country specific additional ad-valorem duty will be effective from April 09, 2025. The additional duty on India as per Annex I of the US President’s Executive Order on Reciprocal Tariffs is 27%.

This order comes in the backdrop of ongoing discussions between India and the US on ways to balance the trade deficit. A mutually-agreeable and multi-sectoral Bilateral Trade Agreement is also being hashed out and is expected to be ready by autumn of 2025. Both parties are aiming for an expeditious conclusion to the deal which will promote trade, investments and technology transfer between the partners. These consultations commenced after Prime Minister Narendra Modi and the US President Trump announced on 13 February 2025 ‘Mission 500’ – aiming to more than double the bilateral trade to US $500 Billion by 2030.

The Department of Commerce said in the communique that it is also studying the opportunities that may arise due to the new development in US trade policy. Officials on both sides have endeavoured to align the goal of a Viksit Bharat with the US’s intensified push for domestic manufacturing.

The India-U.S. Comprehensive Global Strategic Partnership is expected to evolve in mutually beneficial ways as many experts believe that the tariffs are only an avenue to open negotiations between the two countries. PM Modi and US President Trump set a new benchmark for shared trade ties through a new initiative announced in February – India-US ‘Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology’ (COMPACT). Under this, both leaders committed to a results-driven agenda whose outcomes will be reviewed on a timely basis.