US 100% tariff threat: India should seek waivers, exclusions, say experts

New Delhi: India should adopt a calibrated response to a new US law that allows tariffs of up to 100 per cent on countries purchasing Russian oil and gas, experts said on Saturday.

Dr Manoranjan Sharma, Chief Economist at Infomerics Ratings, said New Delhi should prioritise seeking product-specific exclusions, tariff-rate quotas, transition periods, a phased reduction in Russian crude purchases and a clear ceiling below the statutory maximum tariff of 100 per cent.

“The waiver provision in the US law creates diplomatic space; India should use it,” Sharma said.

He urged India to seek long-term US energy supply arrangements, greater market access for Indian pharmaceuticals, engineering goods, gems and jewellery, and relief for supply chains in which US companies depend on Indian inputs.

“If the US government expects India to diversify its oil basket, it should help make that transition economically feasible,” he said.

Sharma also suggested targeted measures such as temporary interest subvention, enhanced export-credit insurance, faster duty refunds, logistics support and working-capital assistance for firms and labour-intensive clusters demonstrably affected by US measures.

He said India should urgently turn its trade diplomacy with the European Union, the United Kingdom, Canada, Gulf economies and other partners into commercially meaningful market access.

“Diversification must mean more than finding new destinations for the same low-margin products. It requires higher quality, design capability, trusted standards, local distribution networks and movement into technology-intensive goods,” he added.

The new US law, however, does not at this stage mean that a 100 per cent tariff has been imposed on all Indian exports. It gives US President Donald Trump discretionary authority to impose such tariffs, subject to specified conditions and waiver provisions.

India is among the largest buyers of Russian crude, making it a potential target of the measure as an instrument of economic and geopolitical pressure.

The United States is India's largest merchandise export market. India exported goods worth about $87.3 billion to the US in FY26, compared with $86.5 billion in FY2024-25.

Imports from the US stood at $53.5 billion, leaving India with a goods trade surplus of about $33.8 billion.

With IANS inputs