US report slams India; flags 'high' import tariffs, other trade barriers

New Delhi: India imposes 'high' import tariffs on a range of goods—including agricultural products, pharmaceuticals, and beverages—and the country also maintains various non-tariff barriers. This observation was highlighted in a report issued by the United States. Conversely, India has consistently maintained that its tariffs remain fully compliant with World Trade Organization (WTO) regulations.

What Concerns does the US Report Highlight?

According to the 2026 National Trade Estimate (NTE) report, released on March 31 by the Office of the United States Trade Representative (USTR), the significant disparity between India's WTO-bound tariff rates and its actual applied rates grants the country substantial flexibility to alter tariff levels for both agricultural and non-agricultural products at any given time. This situation creates uncertainty for American workers, farmers, ranchers, and exporters.

This annual report enumerates the key policies and practices of various nations that impact U.S. exports, investments, and digital trade. The 2025 edition of the report had similarly alleged that India maintains high import tariffs.

The report outlines numerous trade and regulatory challenges characterizing the relationship between the United States and India, encompassing issues related to tariffs, non-tariff barriers, intellectual property rights, services, digital trade, and transparency.

What do experts say?

According to trade experts, the majority of these issues represent a reiteration of concerns raised in previous reports, while some have already been resolved.

The report notes that India maintains high applied tariffs on a wide array of goods. These include vegetable oils (up to 45 percent); apples, corn, and motorcycles (50 percent); motor vehicles and flowers (60 percent); natural rubber (70 percent); coffee, raisins, and walnuts (100 percent); and beverages (150 percent).

Furthermore, the report states that India levies exceptionally high basic customs duties on pharmaceutical preparations—a category that includes life-saving medications as well as finished drugs listed in the World Health Organization's (WHO) Model List of Essential Medicines. According to the report, high tariff rates also constitute a major barrier to the trade of other agricultural products and processed foods. These include poultry products, potatoes, citrus fruits, almonds, pecans, apples, grapes, canned peaches, chocolates, biscuits, frozen French fries, and other prepared foods used in fast-food restaurants.

Has India Altered Surcharge?

The report states that India's tariff rates on agricultural products are among the highest in the world—as established within the WTO framework—averaging 113.1 percent, and in some instances, reaching as high as 300 percent. India regularly modifies the surcharges applicable to various agricultural products.

Were Tariffs Reduced?

However, the report also notes that in the 2026 budget, India reduced applicable tariffs on numerous products across several sectors. These include life-saving medicines; raw materials and components for the manufacture of electric vehicles and mobile phone batteries; lithium-ion battery scrap; critical minerals such as cobalt powder, lead, and zinc; certain electronic components; mobile phone parts; and other industrial raw materials.

Regarding non-tariff barriers, the report states that India has implemented import restrictions, quotas, licensing requirements, mandatory Quality Control Orders (QCOs), customs-related hurdles, price controls on medical devices, and mandatory domestic testing and certification requirements for equipment on certain goods.

What is Impact on the US?

The report asserts that the opaque and unpredictable nature of India's implementation of quantitative restrictions has adversely affected market access for U.S. exporters. The United States and other trading partners have consistently raised this issue within the WTO. To enforce import licensing requirements, India distinguishes between new goods and goods that are old, refurbished, repaired, or reconditioned. The report also alleged that tariff rates in India are announced in the annual budget and subsequently amended periodically through notifications in the Gazette, without providing an opportunity for public comment.

Furthermore, various types of exemptions apply to these tariff rates, varying based on the product, user, purpose of use, or specific export incentive programs. This renders India's customs system complex and expands the scope for administrative discretion. The report characterized India's policy of prioritizing domestic satellites for Direct-to-Home (DTH) TV services, as well as its practice of imposing localized internet shutdowns, as barriers to foreign trade. It stated that localized internet shutdowns restrict access to information and services, thereby disrupting business activities and hindering revenue generation from digital services. According to the report, the Ministry of Information and Broadcasting prioritizes the use of Indian satellites for DTH services.