The move raised concerns about a new trade war between Washington and New Delhi.
Speaking to the US Congress on the evening of March 4, Mr. Trump strongly criticized the import tariffs imposed by India, China and the European Union (EU) on US goods.
India has increased the tariffs on imported cars from the US to more than 100%. This is unfair, Trump said.
He continued to emphasize: The EU, China, Brazil, India, Mexico, Canada - you havent heard of them - and countless other countries are imposing much higher taxes than us. That is too unfair.
The tariff issue was previously raised by Indian Prime Minister Narendra Modi during a meeting with President Donald Trump in Washington last month. Local sources revealed that New Delhi has prepared a detailed dossier on US import tariffs on major industrial items from India.
Despite increased tensions, the two leaders are still committed to raising bilateral trade turnover to 500 billion USD by 2030, double the current level. The two sides also aim to complete the first phase of the bilateral Trade Agreement (BTA) in the fall of 2025 to remove existing trade barriers.
However, President Trump clearly affirmed his stance in an interview with Fox News after meeting with Prime Minister Narendra Modi: "As much as India taxes us, we will tax it back."
Washington also proposed a 25% tariff on imported pharmaceuticals, a decision that could increase drug prices in the US, causing concerns for both Indian suppliers and US consumers.
Mr. Trump said that this tax rate could continue to increase for a year, but will not apply to companies with factories in the US. In addition to pharmaceuticals, import taxes on semiconductor chips will also be pushed up by at least 25%.
The US is suffering a $100 billion trade deficit with India, and Trump said the tariffs would help narrow the gap. However, New Delhi officials warn that their exports are struggling due to increasingly tough trade policies from the US and EU.
Santosh Sarangi, head of the General Department of Foreign Trade of India (DGFT), emphasized: "It is time for India to comprehensively review its trade and industrial policies."
Meanwhile, Indian businesses in the automobile, agricultural and pharmaceutical sectors have expressed concern about the move. According to Citi Research's analysis, the US countervailing tax policy could cost India up to $7 billion a year.
