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India
India is considering reducing tariffs on more than half of US imports, worth $23 billion, as part of an early-phase trade deal between the two countries, Reuters reported on Tuesday, citing government sources. The proposed reduction is intended to fend off reciprocal tariffs threatened by the US, which are set to take effect on April 2.
Sources familiar with the matter told Reuters that India has conducted an internal analysis estimating that such reciprocal tariffs could affect 87% of the country’s $66 billion exports to the US.
Consequently, New Delhi is reportedly exploring options to reduce tariffs on 55% of US imports that currently face duties ranging from 5-30 per cent, the report stated, quoting the two government sources as revealing on the condition of anonymity. The possible reductions could potentially include substantial cuts or the complete elimination of tariffs on goods worth over $23 billion, one of the sources further told Reuters.
The Indian officials told the publication that the decision is still not final, with alternative options, such as product-specific negotiations and sectoral tariff adjustments, also being discussed. They further warned that potential tariff cuts on US imports hinge on securing relief from reciprocal tax.
The proposed deal comes after PM Modi’s visit to the US in February, during which both nations agreed to start talks aimed at reaching an early trade deal and resolving tariff-related issues.
President Donald Trump has long criticised India’s tariff structure, vowing to impose tariffs on any nation that he perceives as “unfairly” taxing American goods.
US Trade Representative for South and Central Asia Brendan Lynch is visiting India from March 25-29 along with a delegation of US government officials for meetings with Indian interlocutors as part of ongoing bilateral trade discussions.
His visit reflects the United States’ continued commitment to advancing a productive and balanced trade relationship with India, an earlier statement from the US embassy had said,
“We value our ongoing engagement with the Government of India on trade and investment matters and look forward to continuing these discussions in a constructive, equitable, and forward-looking manner”, the statement read.
