360info · Feb 7, 2026

India's High Tariffs and the Strategy for Export Competitiveness

India maintains a paradoxical trade stance, balancing protectionist tariffs with a liberal agenda through various free trade agreements.
High import tariffs serve as structural constraints, increasing costs for intermediate goods and eroding the competitiveness of Indian exporters.
Experts urge India to shift its tariff framework from a reactive shield to a proactive strategic tool for global market integration.

India’s simple average Most Favoured Nation (MFN) tariff rate is 15.8%, with agriculture peaking as high as 113.1%.
While high tariff flexibility allows rapid intervention against import surges or dumping—such as recent duties on steel and metallurgical coke—it complicates supply chains.
These rates are among the highest in the G20, creating friction in global trade relations and triggering retaliatory concerns.

Frequent tariff adjustments raise input costs for downstream manufacturers, such as those in the automobile and engineering sectors.
Reliance on market diversification (e.g., Africa, West Asia) is insufficient to replace the need for long-term cost efficiency and scale.
Tensions over tariff asymmetries complicate trade negotiations, particularly with the US, threatening India’s credibility in international markets.

Rationalize tariffs on critical intermediate inputs for export-oriented sectors like electronics and food processing to lower production burdens.
Align tariff policy with Production-Linked Incentive (PLI) schemes and broader logistics reforms to boost productivity.
Use Free Trade Agreements (FTAs) as comprehensive frameworks for market access, covering services, digital trade, and standards rather than just tariff cuts.
Narrow the gap between bound and applied tariffs to provide predictability for trading partners and increase investor confidence.

360info · Feb 7, 2026

India maintains a paradoxical trade stance, balancing protectionist tariffs with a liberal agenda through various free trade agreements.
High import tariffs serve as structural constraints, increasing costs for intermediate goods and eroding the competitiveness of Indian exporters.
Experts urge India to shift its tariff framework from a reactive shield to a proactive strategic tool for global market integration.

India’s simple average Most Favoured Nation (MFN) tariff rate is 15.8%, with agriculture peaking as high as 113.1%.
While high tariff flexibility allows rapid intervention against import surges or dumping—such as recent duties on steel and metallurgical coke—it complicates supply chains.
These rates are among the highest in the G20, creating friction in global trade relations and triggering retaliatory concerns.

Frequent tariff adjustments raise input costs for downstream manufacturers, such as those in the automobile and engineering sectors.
Reliance on market diversification (e.g., Africa, West Asia) is insufficient to replace the need for long-term cost efficiency and scale.
Tensions over tariff asymmetries complicate trade negotiations, particularly with the US, threatening India’s credibility in international markets.

Rationalize tariffs on critical intermediate inputs for export-oriented sectors like electronics and food processing to lower production burdens.
Align tariff policy with Production-Linked Incentive (PLI) schemes and broader logistics reforms to boost productivity.
Use Free Trade Agreements (FTAs) as comprehensive frameworks for market access, covering services, digital trade, and standards rather than just tariff cuts.
Narrow the gap between bound and applied tariffs to provide predictability for trading partners and increase investor confidence.

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