India Reduces Tariffs Following Bilateral Talks with Trump
In a significant move to ease trade tensions, India has cut import duty on bourbon whisky from 150% to 100%. This decision comes amid growing pressure from former US President Donald Trump, who has repeatedly criticized India’s high tariffs on American goods, calling them “unfair trade barriers.”
The announcement was officially made through a Department of Revenue notification on February 13, but it gained widespread attention only after Prime Minister Narendra Modi’s meeting with Trump. The decision is seen as part of India’s broader efforts to strengthen its economic ties with the United States while addressing concerns raised by the US administration regarding market access.
Impact on US Whisky Imports
The reduction in import duty is expected to benefit US-based whisky brands, particularly Suntory’s Jim Beam and other premium bourbon producers. Industry experts see this as a positive step towards fostering better trade relations between India and the US, which have often been strained over tariff disputes.
While bourbon whisky received a tariff cut, other imported alcoholic beverages will still be subject to a 100% duty. This selective reduction signals India’s strategic approach in balancing domestic industry interests with the need to maintain favourable trade relations with key global partners.
Addressing Trade Imbalances and Tariff Concerns
The tariff reduction is viewed as India’s response to Trump’s calls for “reciprocal” tariffs, where US import duties would match those imposed by other countries. Trump has consistently pushed for a fairer trade balance, pointing out that India’s average applied Most Favored Nation (MFN) tariff on agricultural goods stands at 39%, significantly higher than the US average of 5%.
Additionally, Trump has implemented various tariff measures to protect US industries, including a 25% tariff on steel and aluminium imports and a 10% tariff on Chinese imports. By reducing bourbon whisky tariffs, India is demonstrating its willingness to negotiate and adjust its trade policies for key partners while maintaining its stance on overall import duties.
A Strategic Move for Strengthening US-India Relations
The tariff cut reflects India’s broader trade strategy—maintaining a balance between protecting domestic industries and engaging in fair trade practices with global partners. As India and the US continue to navigate complex trade negotiations, this move could set a precedent for future tariff reductions on other American products.
By addressing Trump’s concerns, India is not only easing trade tensions but also reinforcing its commitment to a stable and cooperative economic partnership with the US. Whether this will lead to further concessions or a reciprocal response from the US remains to be seen, but for now, bourbon lovers in India can expect a slight relief in prices.
(With inputs from agencies)
