The trade relationship between the United States and India has seen its share of friction, and the ongoing tariff dispute is one of the most prominent examples. While the two nations are strategic partners in many areas, when it comes to import duties, they’ve often found themselves on opposite sides of the negotiating table.

The Roots of the Dispute

The seeds of the tariff tensions were planted years ago but grew into a full-blown conflict between 2018 and 2019. For a long time, the U.S. has argued that India imposes excessively high import duties on certain American goods — from agricultural products and dairy items to medical devices and motorcycles.

A flashpoint came in 2018 when then-President Donald Trump publicly criticized India’s steep tariffs on high-end motorcycles, such as Harley-Davidsons, which could face duties exceeding 100%. This was followed by broader U.S. trade actions that further strained the relationship.

The GSP Withdrawal

For decades, India benefited from the Generalized System of Preferences (GSP), a U.S. program that allowed certain goods from developing countries to enter American markets tariff-free. In 2019, the Trump administration withdrew India’s GSP benefits, stating that India had failed to provide “equitable and reasonable” market access for U.S. products.

This move affected about $5.6 billion worth of Indian exports that had previously enjoyed zero tariffs in the U.S. It was a turning point that transformed simmering trade issues into an active dispute.

India’s Response

In retaliation — and in response to earlier U.S. tariffs on steel (25%) and aluminum (10%) — India slapped additional import duties on 28 American products. These included popular U.S. exports like almonds, walnuts, and apples, which hit American farmers and exporters directly.

The Core Issue: Market Access vs. Protectionism

At its heart, the tariff dispute is about how open each country’s market should be.

• U.S. stance: India’s high tariffs and trade restrictions hurt American exporters. Washington wants India to lower duties and remove barriers on goods such as agricultural produce, dairy products, and medical devices.
• India’s stance: As a developing economy, India argues it needs to protect its farmers and domestic industries from being overwhelmed by cheaper imports. It also points out that its tariff rates fall within limits set by the World Trade Organization (WTO).

Where Things Stand Now

Under the Biden administration, the tone has softened, and both sides have worked to settle certain disputes. In recent years, there have been sector-specific resolutions — for example, lowering tariffs on some U.S. goods in exchange for easing restrictions on Indian exports.

However, differences remain, especially in sensitive sectors like agriculture and technology imports. While the USA–India partnership is strong in defense, energy, and geopolitics, their trade relationship still requires careful balancing.

Why It Matters

This dispute isn’t just about tariffs; it’s about the balance between free trade and domestic protection. For businesses, farmers, and consumers in both countries, the outcome of these negotiations can affect prices, product availability, and export opportunities.

In an era where global trade policies are constantly shifting, the USA–India tariff dispute serves as a reminder that even strong partners can clash when it comes to economic interests — and that finding common ground takes both political will and economic compromise.