US penal tariff on Indian imports likely to be withdrawn after November 30 : CEA V Anantha Nageswaran

KOLKATA : Chief Economic Adviser (CEA) V Anantha Nageswaran on Thursday expressed confidence that the penal tariff imposed on certain imports may be withdrawn after November 30, raising hopes of a potential easing of trade restrictions amid ongoing discussions.

Speaking at an event organised by the Merchants’ Chamber of Commerce & Industry in Kolkata, Anantha Nageswaran said, “All of us are already at work, and I will take some time to talk about the tariff here. Yes, the original reciprocal tariff of 25 per cent plus the penal tariff of 25 per cent both were not anticipated. I still believe that geopolitical circumstances may have led to the second 25 per cent tariff, but considering recent developments in the last couple of weeks and so on, I do believe that and I have no particular reason to say so it is my intuition that I do believe the penal tariff will not be there after November 30.”

The CEA further added, “I do believe that there will be a resolution in the next couple of months on the penal tariff and hopefully on the reciprocal tariffs,” while pointing to the continued trade talks between India and the U.S.

Highlighting India’s growing trade strength, Nageswaran noted that the country’s exports have touched $850 billion annually and are on course to hit $1 trillion, representing 25 per cent of GDP — a sign of a healthy and open economy.

The United States had imposed the reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA), invoked by US President Donald Trump. India was initially hit with 25 per cent duties, which were later raised to 50 per cent. These tariffs came into effect on Wednesday and apply to all Indian imports into the U.S. unless specifically exempt.

While most products face the higher duty, the U.S. tariff schedule excludes key categories such as iron and steel, aluminium, passenger vehicles (sedans, SUVs, minivans, vans, and trucks), auto parts, semi-finished copper products, and certain copper derivatives.

According to the Global Trade Research Initiative (GTRI), around 30.2 per cent of India’s exports to the U.S., valued at USD 27.6 billion, will continue to enter duty-free despite the higher tariff regime.