1.Tariff Types Overview (Trade Tariffs)
What & Where
Tariff: border tax on imported goods, collected at customs to regulate trade and shelter domestic sectors
Liberation Day plan (USA): universal 10 % duty plus country-specific hikes, 27 % slated on Indian exports
Reciprocal tariff: mirror/offset partner’s duty, deployed for retaliation or bargaining in trade disputes
Quick Facts for MCQs
Tariff Types
- Ad Valorem: value-linked; Specific: quantity-linked; Compound: combines both components
- Anti-Dumping: counters below-cost sales; Countervailing: offsets foreign export subsidies
- Reciprocal: matches partner’s rate, often half or equal magnitude in U.S. proposals
Policy Drivers
- Protection: higher import prices encourage local production and jobs
- Trade-balance: dampens import surge, narrows deficits without currency moves
- Revenue: key fiscal source for nations with narrow tax base
India Angle
- Exposure: pharma, steel, electronics, textiles risk costlier U.S. market entry under 27 % duty
- Response: likely diplomatic pushback, search for alternate export destinations, deeper domestic value chains
- Strategic: tariff hike may test Quad warmth, push India toward diversified trade alliances
Key Data Points
| Feature | Data-Point |
|---|---|
| Baseline Liberation Day duty | 10 % on all U.S. imports |
| Duty on Indian exports | 27 % reciprocal tariff |
| Ad Valorem tariff | % of value; eg 10 % on cars |
| Specific tariff | Fixed per unit; eg $5 per kg sugar |
| Compound tariff | Mix: 5 % of value + $50 per unit |
Related UPSC Prelims PYQs
If India enters into Free Trade Agreements (FTAs) with other nations, then the growth of exports of India would depend upon which of the following?







