US President Donald Trump’s latest push for “reciprocal tariffs” is aimed at reducing trade deficits and aligns with his broader “America First” policy. In 2024, the US trade deficit had surged to $918.4 billion, from $784.9 billion in 2023. The largest deficit was recorded with China at $295.4 billion, while India accounted for only $45.7 billion. Trump has, however, frequently criticised India’s high tariffs and trade barriers on American goods, referring to India as the “tariff king”. During Prime Minister Narendra Modi’s recent US visit, Trump reiterated that India would not be exempt from these proposed tariffs, which are designed to match the import tariffs that other countries impose on US goods.

We don’t know yet whether these reciprocal tariffs will be on all goods or sector by sector or commodity by commodity. But it is better to prepare for the worst, and hope for the best. According to WTO data, India imposes significantly higher tariffs than the US, with a simple average rate of 17 percent on all goods, compared to about 3.3 per cent imposed by the US (see graphics). The trade-weighted tariffs further highlight this gap — 12 per cent in India vs. 2.2 per cent in the US. However, the most striking difference is in the agriculture sector, where India’s tariffs are notably higher — the simple average tariff being 39 per cent, and trade-weighted average being 65 per cent. In comparison, the US maintains relatively low agricultural tariffs with a simple average of 5 per cent and a trade-weighted rate of 4 per cent. Given this stark........

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