One of the key reasons behind the tariff hike was the U.S. dissatisfaction with India’s trade practices. Trump and his administration argued that India imposed high import duties on American goods—especially in sectors like agriculture, medical equipment, and automobiles—while enjoying preferential access to the U.S. market under the Generalized System of Preferences (GSP) program.
In 2019, the U.S. removed India from the GSP list, ending its duty-free access for billions of dollars’ worth of exports. Trump claimed this step was necessary because India was not providing “equitable and reasonable” access to its markets for American businesses. The tariff increase was used as leverage to push India into negotiating lower barriers for U.S. products.
While the move strained diplomatic ties temporarily, it also pushed both nations to engage in trade talks. Critics of Trump’s approach argued that the tariff war risked harming both economies, while supporters believed it was a strong step toward creating a more balanced trade relationship.