India maintains high import duty, non-tariff barriers on American goods: US report

New Delhi: India maintains "high" import duties on a wide range of American goods such as agricultural items, drug formulations, and alcoholic beverages, besides imposing non-tariff barriers, a US report said.

A day before announcing reciprocal tariffs, the US Trade Representative (USTR) released the 2025 National Trade Estimate (NTE) Report on March 31.

It is an annual report that lists key policies and practices of countries that affect US exports, investments, and digital trade.

The report highlights several trade and regulatory challenges between the US and India, including issues related to tariffs, non-tariff barriers, intellectual property, services, digital trade, and transparency.

According to trade experts, most of the issues are repeats of earlier reports, and few have been resolved already.

"India maintains high applied tariffs on a wide range of goods, including vegetable oils (as high as 45 per cent); apples, corn, and motorcycles (50 per cent); automobiles and flowers (60 per cent); natural rubber (70 per cent); coffee, raisins, and walnuts (100 per cent); and alcoholic beverages (150 per cent)," the report said.

In addition, India maintains "very high" basic customs duties on drug formulations, including life-saving drugs and finished medicines listed on the World Health Organisation's list of essential medicines.

"High tariff rates also present a significant barrier to trade in other agricultural goods and processed foods (like poultry, potatoes, citrus, almonds, pecans, apples, grapes, canned peaches, chocolate, cookies, frozen french fries, and other prepared foods used in fast-food restaurants)," it added.

India's World Trade Organisation (WTO) bound tariff rates on agricultural products are among the "highest" in the world, averaging 113.1 per cent and ranging as high as 300 per cent.

"Given the large disparity between WTO bound and applied rates, India has considerable flexibility to change tariff rates for both agricultural and non-agricultural products at any time, creating tremendous uncertainty for US workers, farmers, ranchers, and exporters," the report said.

About non-tariff barriers, it said India has imposed import bans, restrictions, licensing requirements on certain goods, mandatory Quality Control Orders (QCOs), customs barriers, price control on medical devices, and mandatory domestic testing and certification requirements for equipment.

"India's tariff rates are announced with the annual budget and are modified on an ad hoc basis through notifications...without opportunity for comment," it said, adding that the tariff rates are subject to numerous exemptions that vary according to the product, user, intended use, or specific export promotion program.

On the dairy sector, it said India imposes onerous requirements such as mandating that dairy products intended for food be derived from animals that have not consumed feeds containing internal organs, blood meal, or tissues of ruminant or porcine origin and that exporting countries certify to these conditions.

"This requirement, along with the recent dairy health certificate requirements, new facility registration requirements, and high tariff rates, continues to hamper market access for US milk and dairy product exports to India, one of the largest dairy markets in the world," it said.

The US continues to press India to provide greater access to the Indian dairy market.

On intellectual property rights, the report said that in the field of patents, several factors negatively affect stakeholders' perception of India's overall IP regime, investment climate, and innovation goals.

Potential threat of patent revocations and the procedural and discretionary invocation of patentability criteria under the Indian Patents Act impact companies across different sectors are also some of the other concerns, it said adding "India's overall IP enforcement remains inadequate".

Talking about the services sector, the report said foreign investment in businesses in certain major services sectors, including financial services and retail, is subject to limitations on foreign equity, and participation in professional services is significantly restricted.

"In addition, barriers to digital trade and electronic commerce, such as those imposed on electronic payment providers, have secondary effects on a wide variety of services," it added.

Further, it said that Indian information technology rules also include the imposition of impractical compliance deadlines and takedown protocols.

Since 2021, US firms have been subject to an increasing number of takedown requests for content and user accounts related to issues that appear politically motivated, it said.

"India has conducted a number of localised shutdowns of the internet in recent years. These shutdowns restrict access to information and services, disrupting commercial operations, and thereby undermining a free and open internet and impeding trade in the digital economy," it added.