Episode 284: Trumps Discounted Reciprocal Tariffs - Implications for India

In a historic declaration of economic independence on 2 April 2025, President Donald Trump announced a fresh wave of tariffs on its trading partners and adversaries. Despite a relatively successful meeting between Prime Minister Modi and President Trump, India was unable to dodge a bullet on tariffs. President Trump declared a 27 per cent ‘discounted reciprocal tariffs’ on India. The move was seen as a response to India’s trade surplus with the United States (US), which has nearly doubled since President Trump’s first term and is projected to widen further, given India’s strong manufacturing and service sectors. The tariffs aim to address trade imbalances and promote domestic manufacturing in the US by countering what President Trump described as "unfair trade practices." This announcement comes at an important juncture, as both leaders in February 2025 agreed to work on the first phase of a bilateral trade deal in the second half of 2025. In this episode, Mriganika Singh Tanwar, Research Analyst at ISAS-NUS, is in conversation with Dr Amitendu Palit, Senior Research Fellow and Research Lead (Trade and Economics) at ISAS-NUS, to discuss the implications of reciprocal tariffs on the competitiveness of Indian exports. The discussion draws on the long-standing geoeconomic relationship between India and the US, as well as the salient reliance of the Trump administration on using tariffs as a prominent tool to shape global trade dynamics.