New Delhi: The United States has reiterated that India maintains “high” import duties on a wide range of goods, including agricultural products, pharmaceuticals, and alcoholic beverages, alongside multiple non-tariff barriers.
India, however, has consistently maintained that its duties comply with World Trade Organisation (WTO) rules.
National Trade Estimate Report Highlights Trade Challenges
According to the US Trade Representative’s 2026 National Trade Estimate (NTE) Report on foreign trade barriers, released on March 31, India’s large gap between WTO-bound and applied tariff rates gives it significant flexibility to change rates at any time. The report claims this creates uncertainty for US workers, farmers, ranchers, and exporters.
The annual report reviews policies affecting US exports, investments, and digital trade. Many issues flagged in the 2026 report mirror concerns raised in 2025.
High Tariffs Across Key Products
The report lists India’s applied tariffs on key goods as follows: vegetable oils (up to 45%), apples, corn, and motorcycles (50%), automobiles and flowers (60%), natural rubber (70%), coffee, raisins, and walnuts (100%), and alcoholic beverages (150%).
It also notes “very high” basic customs duties on drug formulations, including life-saving medicines listed by the World Health Organisation (WHO). High tariffs extend to other agricultural and processed foods, such as poultry, potatoes, citrus, almonds, grapes, canned peaches, chocolate, cookies, and frozen french fries.
India’s WTO-bound tariffs on agricultural products average 113.1%, with some reaching as high as 300%. The report highlights India’s practice of frequently adjusting surcharges on these goods.
Some Positive Developments Noted
The report acknowledges that India’s 2026 budget reduced applied tariffs on several products, including life-saving medicines, raw materials for electric vehicles and mobile phone batteries, critical minerals like lithium-ion battery scrap, cobalt powder, lead, zinc, certain electronics, mobile phone components, and other industrial inputs.
Non-Tariff Barriers Remain a Concern
The report also flagged multiple non-tariff barriers, including import bans, licensing requirements, mandatory Quality Control Orders (QCOs), customs restrictions, price controls on medical devices, and mandatory domestic testing and certification requirements for equipment.
It noted that obtaining import licenses for remanufactured, refurbished, or secondhand goods is often onerous, with excessive documentation, quantity limits, and long delays.
Customs and QCO Complexities
US stakeholders have raised concerns over India’s customs system, citing ad hoc notifications, numerous exemptions based on product or use, and discretionary administrative practices. Inspections and seizures of imports, often non-risk-based, further complicate trade.
QCOs targeting raw materials and intermediate goods were also criticized for disrupting supply chains. The report added that India’s Bureau of Indian Standards (BIS) standards often differ from international norms, lack clear timelines, and impose burdensome compliance requirements.
Other Trade and Investment Barriers
The report highlighted issues in India’s government procurement, intellectual property policies, and restrictions on foreign investment in major service sectors, including financial services and retail. Participation in professional services remains limited for foreign entities.
Barriers to digital trade, such as restrictions on electronic payment providers and localized Internet shutdowns, were also cited as disrupting commercial operations and affecting US exports.
US to Continue Monitoring
“The United States continues to monitor the impact of these events on US trade and investment, including services exports,” the report stated, emphasizing ongoing concerns regarding India’s trade and regulatory environment.