Financial services firm Nomura forecasts a potential reduction in U.S. tariffs on Indian exports, cutting the current combined 50% duty—comprising a 25% reciprocal tariff plus a 25% penalty linked to India’s purchase of Russian oil—down to 25% by November 2025. Nomura expects this Russia-related penalty to be lifted post-November, while maintaining the reciprocal tariff into FY26.
Tariff Structure Overview
- Current Tariffs: India faces a 50% total tariff—25% reciprocal duties plus an additional 25% on account of continued Russian oil imports
- Potential Cut: With the Russia-linked tariff expected to be removed by November, exporters may see effective duties drop to 25%, offering much-needed breathing room
- U.S.-India Talks: Trade negotiations remain in flux; India has shown willingness to substantially cut its own tariffs, though progress had been limited as of July.
Why It Matters
| Factor | Insight |
|---|---|
| Export Relief | A tariff reduction could restore competitiveness for Indian exporters in key sectors like textiles and seafood. |
| Diplomatic Leverage | While not confirmed, the forecasted cut reflects ongoing diplomatic efforts to de-escalate trade tensions. |
| Economic Impact | Relief in tariffs could stabilize economic forecasts, though Nomura has already revised India’s FY26 GDP estimate downward due to export slowdowns. |
