US Commerce Secretary Warns India Over High Tariffs, Threatens Action
US Commerce Secretary Howard Lutnick has issued a stern warning to India, criticizing its high tariffs and lack of market access for American goods, particularly agricultural products like corn. Lutnick stated that the trade relationship is "one way" and asserted that New Delhi must lower its tariffs or face a "tough time" doing business with the U.S. The comments signal escalating trade tensions between the two nations, with the Trump administration threatening reciprocal tariffs to address what it calls an unfair dynamic.
Unpacked:
India uses high tariffs to protect its domestic farmers, who are often smallholders vulnerable to foreign competition. The government argues this policy is necessary to support rural livelihoods and food security, even though it leads to limited market access for U.S. agricultural exports.
Reciprocal U.S. tariffs, now raised to 50%, directly impact over half of Indian exports to the U.S., especially processed food and protein products. This move puts Indian exporters at a major competitive disadvantage, risking a significant decline in export volumes and earnings, and threatening India’s $87.4 billion export flow to the U.S.
Escalating trade tensions could undermine the broader economic and strategic partnership between the U.S. and India. While both sides have interests in security and technology cooperation, persistent disputes over market access and tariffs could erode trust and make collaboration on other fronts more difficult.
The U.S. has long criticized India’s high tariffs and market barriers, especially for agriculture. Under the Trump administration, these concerns led to the imposition of steep tariffs on Indian exports in 2025, following similar actions in previous years. India, in turn, defends its policies as necessary for protecting small farmers.