New Delhi: Raising strong concerns over the recent announcement of 25 per cent trade tariffs and additional penalties by the US President, medical device makers in India have called the move troubling and shortsighted.
In a post on Truth Social, Donald Trump said, India will be paying a tariff of “25 per cent” plus an additional “penalty” for expanding ‘arms and energy’ trade with Russia, starting August 1.
“Tariffs in India are among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump alleged in his post.
Criticizing the move, Pavan Choudary, Chairman of an MNC representative body MTaI, said, “Trump’s announcement today on Truth Social declaring steep tariffs on India from August 1 is troubling and seems economically shortsighted and strategically misguided.”
“This move is aimed at partners, not a rival and such missteps could shift Indo-US ties from cooperation to caution,” he added.
Over the additional unspecified penalties announced by Trump, Choudary said, “As a sovereign nation, India makes independent choices and attempting to punish these decisions through coercive trade measures is not only inappropriate but also counterproductive.
Meanwhile, the Union Commerce Ministry in a statement noted, “the government is studying the implications of the US President statement on bilateral trade and will take all steps necessary to secure national interest.”
The announcement has been made ahead of the August 1 deadline for the pause on reciprocal tariffs, which the country administration had introduced to give countries time to negotiate trade agreements.
So far, the two countries have engaged in five rounds of talks discussing various sectoral trade terms and a delegation from the US is set to arrive in India for the sixth round slated for August 25.
The new measures would push import duties on the industry to as high as 35 percent, including the 10 per cent base duty introduced on April 2 and the recently announced additional 25 per cent tariff.
Until now, medical devices from India were not subject to any tariffs in the US while imports to India attract a basic customs duty (tariffs) of 0-7.5 per cent.
Notably, India has a high-import dependency in the medical devices sector and around 80-85 per cent of total device requirement is met through Imports where US-based companies have a sizeable share.
According to the Exports Promotion Council of Medical Devices, in FY 2023-24, India’s exported $714.38 million (around ₹6000 crore) worth of medical devices to the US, while imports from the US to India were more than double at $1,519 million (around ₹12,900 crore).
Earlier this year, the US Trade Representative (USTR) in a report outlined that certain compliance requirements in India are burdensome and a fact sheet issued by the White House noted, “If these barriers were removed, US exports could rise by at least $5.3 billion annually.”
Another industry voice Rajiv Nath Forum Coordinator of an domestic device makers body AiMeD suggest, such steep tariffs will definitely provide protection to US based manufacturers and for products in low risk, high volume category where manufacturing had been moved from US and Indian players have a natural competitive advantage may see reverse investments into US.
