India is often accused of being the king of tariffs?
India is often accused of being a “tariff king”—a label that seems to imply that the country is isolating itself with high import duties. But is this really true? This narrative is often exaggerated, even false. Rather than relying on perception, let’s consider the facts, figures, and economic context behind it.
What is the Function of Tariffs in Developing Countries?
In low-income and developing countries, tariffs are not simply a trade instrument. They serve two purposes:
• Protecting domestic industries—especially those that are still “infant” or fragile, which need time to develop before they can compete in the global market.
• Raising government revenue—for example, through tariffs on premium products like alcohol or luxury vehicles.
These two functions differ significantly from practices in developed countries like the United States, which already have an established industrial base and rely more on domestic taxes than import duties.
From Protectionism to Gradual Liberalization
It is true that India’s tariffs were high in the 1980s. However, since the 1991 reforms and the Uruguay Round agreements that gave birth to the WTO, India has consistently lowered its tariffs. The long-term trend is clear: a gradual decline.
It is important to distinguish between two types of tariffs:
• Applied tariffs: the actual tariffs imposed on goods entering the country.
• Bounded tariffs: the maximum tariff limits promised in WTO commitments.
Critics of India’s tariffs often overlook this distinction, but it is the applied tariffs that are relevant to real trade.
A Often Misunderstood Figure
Looking at just India’s simple average tariff, 15.98 percent, at first glance seems high. However, this measure is misleading because it treats all products equally, without taking into account trade volume.
A more accurate measure is the trade-weighted tariff, which reflects the real weight of trade. Using this method, India’s tariff is only 4.6 percent—on par with, or even lower than, many other developing countries. This figure alone is enough to rebut the label “tariff king.”
Why Are Tariffs in the Agriculture and Automotive Sectors High?
There are two major exceptions: agriculture and automotive.
• Agriculture: More than 50 percent of India’s population depends on this sector. With limited land, minimal technology, and a subsistence-oriented economy, opening the floodgates to imports would mean displacing millions of small farmers. No democratic government would take such a political risk. Moreover, Western farmers enjoy massive subsidies—creating unfair competition from the outset.
• Automotive: This industry employs millions of workers and is one of the backbones of manufacturing. Protectionism here has more to do with economic and social stability, not simply trade calculations.
It’s worth noting that other countries have taken similar, if not more aggressive, measures. The European Union has imposed tariffs of up to 205 percent on dairy products and 261 percent on fruits and vegetables. Japan has reached 298 percent on milk and over 250 percent on cereals and meat. South Korea has even exceeded 800 percent on vegetables. Compared to these figures, India’s tariffs appear moderate.
Comparison with Other Developing Countries
India’s tariffs are not significantly different from those of other developing countries. Bangladesh averages 14.1 percent, Argentina 13.4 percent, and Turkey 16.2 percent. In other words, India doesn’t deviate from the global norm.
What about Non-Agricultural Goods?
Criticism from the United States often targets non-agricultural products. However, in the technology and electronics sectors, India’s tariffs are actually quite friendly:
• 0 percent for most IT hardware, semiconductors, and computers.
• An average of just 10.9 percent for electronics, and 8.3 percent for computing machines.
Contrast that with Vietnam, which imposes tariffs of up to 35 percent, China up to 25 percent, or India up to 30 percent in similar sectors. Clearly, India is no exception.
So, Who Is the Real Tariff King?
The title “tariff king” for India is more political rhetoric than a reflection of reality. Yes, India protects its agricultural and automotive sectors—but the social, economic, and political reasons behind this are sound and comparable to practices in other countries.
For most other sectors, India’s tariffs are actually low, in line with global standards, and even more liberal than some of its Asian neighbors.
Thus, calling India a “tariff king” is an oversimplification and fails to take into account data, context, and international comparisons. The more appropriate question is not whether India is a tariff king, but rather: who is actually more protectionist?
