Time to recalibrate 'reciprocity' in Indo-US trade ties

To preserve momentum in digital cooperation, India and the US must urgently recalibrate tariff and non-tariff barriers on telecom hardware to ensure mutual growth.

- DR JAIJIT BHATTACHARYA & ANUSHKA VERMA

A new wave of tariff decisions is testing trade relations between the United States and India. These decisions could either reinforce a spirit of mutual growth or drive a wedge between two of the world's largest democracies. As negotiations for a Bilateral Trade Agreement continue, the sweeping series of "reciprocal tariffs" announced by the US has sparked concern, particularly in sectors critical to national infrastructure.

Among these, telecom equipment has emerged as a focal point. While these duties are being justified under the label of reciprocity, a deeper look reveals that they are, in fact, disproportionately higher than India's corresponding tariffs. Without a course correction, the consequences could reverberate across industries, supply chains, and the larger strategic alignment between the two nations.

THE CASE OF TELECOM EQUIPMENT TARIFFS

The newly announced US tariffs, often exceeding 26%, stand in stark contrast to India's existing duties on similar products, which fall between 10% and 15%. While US officials have previously criticised India for imposing tariffs of 10-20% on items like routers and switches, compared to the earlier 0% rate in America, the latest tariff hike far surpasses these figures. Official data highlights the extent of this imbalance (see table: The US Tariff Disparity)