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As the deadline for U.S. President Donald Trump’s proposed reciprocal tariff plan approaches, a U.S. delegation led by Assistant U.S. Trade Representative Brendan Lynch is set to arrive in New Delhi on Tuesday for crucial bilateral trade discussions.
Trump Tariffs To Begin April 2
Trump is expected to unveil his tariff plan on April 2, targeting all trading partners, including India, in an effort to correct the U.S. trade deficit. India, along with several other nations, currently enjoys a trade surplus with the U.S.
Lynch, who oversees trade relations with South and Central Asia, will be in India from March 25 to 29 for discussions with Indian officials, according to a spokesperson from the U.S. Embassy. The US and India aim to finalize a bilateral trade agreement by the fall of 2025.
India also sees this visit as an opportunity to build upon negotiations that took place during Commerce Minister Piyush Goyal’s high-level delegation visit to the U.S. from March 4 to 8.
India-U.S. Trade Talks To Strengthen Bilateral Trade Relations
Commenting on the upcoming talks, Goyal emphasized India’s commitment to working with the U.S. to enhance economic collaboration. “As directed by the leaders of the two countries, India remains committed to working with the U.S. in trade and economic domains to enhance prosperity and innovation in both India and the U.S., and to deepen supply chain integration between the two countries,” he said to Mint.
“We look forward to productive and constructive discussions with the incoming U.S. delegation to expand and deepen our bilateral trade and economic ties in a mutually beneficial manner,” he added.
The proposed Bilateral Trade Agreement (BTA) aims to expand trade between the two countries from $200 billion to $500 billion by 2030. As per a report by Mint on February 18, India is seeking reciprocal tariff reductions from the U.S. to facilitate this growth. With negotiations progressing positively, both nations have agreed to work towards reducing tariffs to encourage trade expansion.
“Both countries now have a better understanding of each other’s concerns as they work towards finalizing the contours of the bilateral trade agreement. The visit of the U.S. delegation will scale up the talks and resolve the sticky issues,” said a senior government official on condition of anonymity.
The U.S. has raised concerns over high tariffs on agricultural products, an uneven playing field in the e-commerce sector, and non-tariff barriers restricting access to its goods and services in the Indian market.
India Implements Tariff Reductions
In an effort to ease trade tensions, India has already lowered some import duties, benefiting U.S. exporters. These reductions include a tariff cut on motorcycles, benefiting American brand Harley-Davidson, along with reduced duties on bourbon whiskey and ethernet products.
- Motorcycles: Tariff reduced from 50% to 30%
- Ethernet switches: Duty cut from 20% to 10%
- Bourbon whiskey: Tariff lowered from 150% to 100%
India’s exports to the U.S. have shown fluctuations in recent years. While exports rose from $75.60 billion in FY22 to $78.31 billion in FY23, they slightly declined to $77.52 billion in FY24. However, from April to February of FY25, exports increased to $76.38 billion, compared to $70.01 billion during the same period in FY24, according to data from the Commerce Ministry.
Tariff Disparities and Market Access Concerns
A fact sheet on Fair and Reciprocal Tax, signed by Trump ahead of his meeting with Indian Prime Minister Narendra Modi on February 13, highlighted tariff disparities between the two nations. According to Washington, while the U.S. applies a 5% most-favored nation (MFN) tariff on agricultural goods, India’s rate stands at 39%.
Additionally, the U.S. has pointed out India’s 100% tariff on American motorcycles, compared to the 2.4% duty it imposes on Indian motorcycles. During a joint press conference after their February meeting, Trump reiterated his concerns about India’s trade policies, calling the country’s import duties “very unfair and strong.” Despite calling Modi a friend, he made it clear that India would not be exempt from his planned tariff hikes.
Minimal Tariffs on Key U.S. Exports
Commerce Ministry data reveals that India imposes minimal tariffs on several high-value American exports. For instance:
- Petroleum crude (the U.S.’s top export to India, worth $5.03 billion in FY24) is taxed at just ₹1 per tonne.
- Coal ($4.2 billion in FY24), large aircraft ($1.94 billion), and liquefied natural gas ($1.41 billion) carry a modest 2.5% tariff.
Despite these favorable conditions, India, with a $35-billion merchandise trade surplus in FY24, remains wary of potential U.S. tariff hikes on its key exports. Sectors such as garments, electronics, engineering goods, and pharmaceuticals—whose combined exports rose from $38.84 billion in FY22 to $46.43 billion in FY24—could face increased duties if trade tensions escalate.
Also Read: India-US Trade Talks: Trump Administration Officials To Visit India From March 25-29
