RAS question
What was the tariff rate on Indian goods imposed by the US prior to the India-US trade deal?
Correct answer: (C) 25%.
Before the India-US trade deal, the United States imposed a 25% reciprocal tariff rate on Indian goods.
Explanation
The pre-deal tariff rate was 25%, because the official White House order on reciprocal tariff rates placed India in Annex I with a 25% adjusted reciprocal tariff. At that time, this 25% reciprocal tariff was accompanied by a further 25% punitive duty linked to Russian oil purchases. The later India-US trade deal changed that position by reducing the levy to 18% and removing the oil-linked duty. Before the deal, the reciprocal tariff rate in force was 25%, not the post-deal figure of 18%.
Why the other options are wrong
- (A) 15% is wrong because the official reciprocal tariff listing for India was 25%, not 15%.
- (B) 18% is wrong because it applied after the trade deal, while the pre-deal reciprocal tariff rate was 25%.
- (D) 30% is wrong because India was listed at 25% in the reciprocal tariff schedule, not at the higher 30% rate.
Concept
Applied trade policy under Indian Economy includes reciprocal tariffs and negotiated tariff reductions. RAS often asks such questions because tariff measures connect current affairs with balance-of-trade, external sector and India-US economic relations.