​Time to push back: On India and the continuing U.S. pressure

Distilled Policy Brief

• The United States has accused India, among around 40 countries, of being a top 'enabler' of China's evasion of U.S. tariffs. The accusation states that India imports Chinese goods, makes minor modifications, and then exports them to the U.S. at lower tariffs than Chinese goods would face.
• While Chinese imports are a significant pillar of Indian manufacturing, their nature is changing, with India moving away from importing finished products for cosmetic changes. Instead, the share of intermediate goods in Indian imports from China has been rising, supporting India's own assembly and manufacturing in several sectors and contributing to the 'Make in India' initiative.
• India has previously bowed to U.S. pressure, cutting tariffs on high-end motorcycles to 50% in 2018 (from 60%-75%) and further to 40% by February 2025. Similar tariff reductions were made on shrimp feed and its components in the February 2024 Budget, and on frozen duck and turkey. Additionally, pressure from 50% punitive tariffs pushed India to diversify from Russian oil, leading Russia's share in India's oil imports to fall below 20% in January 2026, from nearly double that six months earlier, and India recently diluted its stance by allowing FDI in the e-commerce inventory model, a long-standing demand by Amazon.