Archive · 25 Aug 2026
RBI Staff Says India Better Placed Than China on Tariffs
The United States has added a new 10% tax to many products imported from India.
The RBI staff said India may be less affected than China, Vietnam and Thailand.
This is partly because India faces a lower tariff than those countries.
Some important Indian exports, including smartphones, petroleum products and medicines, are not covered by the tariff.
India’s factories, services, exports and imports continued to perform well in July.
People in both rural and urban areas continued spending.
However, food prices may rise further, especially for rice, wheat, pulses and cooking oils.
The RBI staff said India’s strong economy could help it manage these risks.
RBI staff said India may withstand US Section 301 tariffs better than China, Vietnam and Thailand.
The United States imposed an additional 10% duty on imports from India starting July 24.
Smartphones, petroleum products and pharmaceuticals—major Indian exports to the US—remain outside the levy.
India’s economic activity, domestic demand, exports and imports remained strong in July.
CPI inflation rose to 4.45% in July, while the RBI staff warned of higher food-price risks.
- Who
- The Reserve Bank of India’s staff assessed India’s position relative to other Asian economies.
- What
- The assessment said India is better placed than China, Vietnam and Thailand to manage the US Section 301 tariffs.
- When
- The additional tariffs took effect on July 24; the assessment appeared in the RBI’s August Bulletin.
- Where
- The tariffs apply to imports entering the United States, while the assessment concerns India and other Asian economies.
- Why
- India faces a lower additional tariff, and several major Indian exports to the US are outside the levy.
- Additional tariff on India
- 10% under the US Section 301 tariffs
- Additional tariff on China, Vietnam and Thailand
- 12.5% for each country
- Indian exports outside the levy
- Smartphones, petroleum products and pharmaceuticals
- July CPI inflation
- 4.45%, up from 4.38% in June
- RBI medium-term inflation target
- 4%
- Projected current-year average CPI inflation
- 5%
- Projected inflation peak
- 5.9% in the October-December quarter