US suspends 26% tariff on India till July 9, baseline tariffs and steel levies remain: Report

In a temporary shift from its recent hardline trade stance, the United States has paused additional tariffs on Indian imports for 90 days, offering a vital breather to exporters navigating heightened duties, PTI reported. The decision, formalised via White House executive orders, delays the enforcement of reciprocal tariffs imposed on April 2, when President Donald Trump rolled out sweeping levies on about 60 nations, including India, as part of efforts to reduce the US trade deficit and fortify domestic industries.

India was among the countries hit with a steep 26 percent tariff, higher than rates applied to regional competitors like Thailand, Vietnam, and China. However, the latest order halts enforcement of a specific clause in Executive Order 14257 until July 9, 2025.

“Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on April 10, 2025, enforcement of the second paragraph of section 3(a) of Executive Order 14257 is suspended until 12:01 a.m. eastern daylight time on July 9, 2025,” the executive order stated.

That section details the imposition of reciprocal tariffs, including a list of country-specific rates in Annex 1. Notably, the 10 percent baseline tariff will remain during the suspension period, and the pause does not extend to China, including Hong Kong and Macau.

“Since I (President) signed Executive Order 14257, in contrast to the PRC’s actions, more than 75 other foreign trading partners... have approached the United States to address the lack of trade reciprocity,” the order said.

Despite the suspension, duties on sectors like steel, aluminium (since March 12), and auto components (from April 3) continue, a trade expert told PTI. Meanwhile, semiconductors, pharmaceuticals, and certain energy products remain exempt.

Indian exporters welcomed the 90-day pause as a timely opportunity to advance bilateral trade talks. “It is a good decision by the Trump administration. We have been assured by the commerce ministry that the agreement will be finalised at the earliest,” FIEO President S C Ralhan told PTI.

During a meeting with industry leaders on April 9, Commerce and Industry Minister Piyush Goyal urged exporters not to panic. The ongoing negotiations for a bilateral trade agreement (BTA) aim to boost India-US trade to $500 billion by 2023, up from the current $191 billion. The first phase is expected to conclude by fall this year.

In 2023-24, the US remained India’s largest trading partner, accounting for $119.71 billion in goods trade. India registered a $35.31 billion surplus with the US. China followed closely with $118.39 billion in bilateral trade, but India ran an $85 billion deficit.