India Reevaluates Import Tariffs: Impact on Luxury Cars and Solar Cells

India is considering revising import tariffs on 30-plus items, including luxury cars and solar cells, potentially increasing imports from the U.S. In response to U.S. tariffs, the Indian government has reduced duties on select products while raising the Agriculture Infrastructure Development Cess (AIDC) on others to balance financial implications.

India is poised to reassess tariffs on over 30 items such as luxury cars and solar cells, a move that might result in augmented imports from the United States. This strategy is seen as a countermeasure to the tariff actions of U.S. President Donald Trump, according to a senior finance ministry official.

The Indian government has already enacted tariff reductions on multiple items, including high-end motorcycles, cars, and chemicals in the recent budget. Concurrently, it has introduced the Agriculture Infrastructure Development Cess (AIDC) on numerous goods. This alternative tariff is designed to strike a financial balance amidst the fluctuating global trade policies.

A cut in basic customs duties has led to a reduction in the peak import tariff from 150% to 70%, and the average tariff has decreased to below 11% from 13%. Meanwhile, the AIDC has been increased for a special list of 32 items. Luxury cars now carry a 40% surcharge with reduced basic duties, impacting sectors from transport vehicles to building materials and household items.

(With inputs from agencies.)