US Assessment Exaggerates India's Tariffs on US Products: Bernstein

New Delhi, April 3 (NationPress) The assessment from the United States regarding the tariffs that India imposes on American products is overstated, as it incorporates non-tariff measures like domestic taxes applied within the country, according to a report by the prominent brokerage Bernstein.

According to Bernstein’s findings, the reference tariff utilized by the U.S. results in a 26 percent tariff on Indian goods, which is greater than the actual tariff.

The brokerage emphasized that the U.S. calculations encompass non-tariff measures such as domestic taxes and currency manipulation, which lead to an inflated representation of tariffs that India levies on U.S. goods.

Furthermore, Bernstein notes that these elevated tariffs could significantly contribute to inflation in the U.S., potentially suppressing demand and increasing the likelihood of a recession.

Yet, Bernstein opines that the current tariff strategies might serve as a preliminary stage for negotiations, suggesting that many of these rates may not endure into the latter part of 2025.

For India, the 26 percent reference tariff calculated by the U.S. is considerable, but essential exports such as IT services and pharmaceuticals are excluded from these tariffs.

This exemption offers some relief, as these sectors play a vital role in India’s economy.

Bernstein proposes that India might capitalize on China’s losses, given that tariffs on Chinese goods are even steeper.

Interestingly, a report from the USTR presented to President Trump and Congress on April 1 indicates that “India’s average Most Favoured Nation (MFN) applied tariff rate was 17 percent.”

It further states that “India maintains high applied tariffs on a broad array of goods, including vegetable oils, apples, corn, and motorcycles (50 percent); automobiles and flowers (60 percent); and alcoholic beverages (150 percent).”

The report does not account for the recent reductions in Indian tariffs that were announced for U.S. goods in the Budget 2025-26.

For instance, the duty on motorcycles has been reduced to 40 percent, while the duty on Bourbon Whiskey has been lowered to 100 percent from the previous 150 percent.

According to Bernstein, while certain nations like China may resort to retaliatory actions, many others are expected to pursue back-channel negotiations to alleviate the situation.

On Thursday, China, the European Union, and Canada declared that they would implement countermeasures against the U.S. tariff increase, raising concerns about the onset of a trade war that could exacerbate inflation and hinder growth.

Conversely, Japan has adopted a more cautious stance, stating it would engage in discussions with the U.S. on the matter.

The White House has announced exemptions for particular products, including steel, aluminum, copper, pharmaceuticals, semiconductors, gold, and certain minerals not available in the U.S. However, these exemptions are unlikely to alleviate the long-term risk of a potential recession if tariffs continue and retaliations take place.