US suspends additional 26% tariff on India for 90 days after Donald Trump pauses reciprocal tariffs

The US has announced the suspension of additional tariffs on India for 90 days until July 9 this year, according to the White House executive orders. On April 2, US President Donald Trump slapped universal duties on about 60 countries exporting goods to America and additional steep levies on countries like India.

The move can impact sales of products from shrimp to steel in the world's biggest economy. It was aimed at cutting its trade deficit and boosting domestic manufacturing. US imposed an additional import duty of 26 per cent on India. The tariffs were high on competitors like Thailand, Vietnam and China. The suspension is not applicable to China, including Hong Kong and Macau.

Also Read: Trump tariffs: US President hits India with 26% reciprocal tariff—how could it impact the Indian stock market?

White House order on suspension of US tariffs till July 9

"Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on April 10, 2025, enforcement of the second paragraph of section 3(a) of Executive Order 14257 is suspended until 12:01 a.m. eastern daylight time on July 9, 2025," the order said.

The second paragraph of Section 3 (a) of the executive order issued on April 2 mentions the implementation of reciprocal tariffs. It includes Annex 1 listing rate of tariffs for different countries. However, the 10 per cent baseline tariff imposed on the countries will continue to remain in place.

Also Read: US Tariffs on Pharma: Dr Reddy’s to Sun Pharma—can Indian drugmakers escape Trump’s tariff tantrums?

"Since I (US President Trump) signed Executive Order 14257, in contrast to the PRC’s actions, more than 75 other foreign trading partners, including countries enumerated in Annex I to Executive Order 14257, have approached the United States to address the lack of trade reciprocity in our economic relationships and our resulting national and economic security concerns.

US, India negotiating bilateral trade agreement

Amid a global market meltdown, Trump backed down on his tariffs on most nations for 90 days but raised the tax rate on Chinese imports to 125 per cent. In a meeting with industry and exporters on April 9, Commerce and Industry Minister Piyush Goyal asked exporters not to panic and assured them that India is working on the "right mix and right balance" in its proposed trade agreement with the US.

Also Read: 50 countries including India plan to lower duties in response to Donald Trump’s reciprocal tariffs, claims US Trade Rep

He said the Indian team is working with "speed" but not in "undue haste" to ensure the right outcome for the country. The two countries are negotiating a bilateral trade agreement (BTA) with an aim to more than double their trade to USD 500 billion by 2023 from about USD 191 billion at present. They are aiming to conclude the first phase by the fall (September-October) this year.

The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade. On the other hand, China's share is just about 4 per cent in exports and a staggering 15 per cent in imports.