US Tariff War / Know what is this reciprocal tariff that America imposed on India

US Tariff War: Reciprocal tariff is a policy adopted to balance global trade. Recently, the US announced to impose 26% tariff on India, which will affect agriculture, textile and auto sectors. But what is this policy and how does it affect? ​​Let's understand.

What is reciprocal tariff?

Tariff is a tax imposed by a country on imported goods. Its purpose is to raise revenue for the government and protect domestic industries from foreign competition. At the same time, 'reciprocal' means "as you treat, so you will get." That is, if a country increases the duty on the goods of another country, then in return the same duty will be imposed on the products of that country as well.

How does reciprocal tariff work?

The government uses this policy to ensure fairness in trade and protect its domestic market. For example, if India imposes a 20% tariff on American goods, then the US can also impose a 20% duty on Indian goods. Its main objective is to reduce trade imbalances and benefit domestic producers.

US Tariff Policy and Impact on India

The US government, especially under Donald Trump, has been using tariffs as a diplomatic weapon. Trump imposed reciprocal tariffs on several countries to reduce the US trade deficit and prevent foreign governments from imposing higher taxes on US goods.

The decision to impose a 26% reciprocal tariff on India will have a huge impact on Indian trade. This may harm Indian exporters, especially in sectors that depend on the US market.

Impact on India's Economy

This tariff may put pressure on India's GDP, as the US is a major trading partner for India. If India also imposes reciprocal tariffs, the trade relations between the two countries may be affected.