India-US commerce deal: Modi authorities eyes tariff cuts on greater than half of US imports value $23 billion, says report

India is keen to cut back tariffs on over 50% of American imports valued at $23 billion throughout the preliminary stage of a commerce settlement beneath negotiation between the 2 international locations, two authorities officers informed Reuters. This vital discount goals to forestall retaliatory reciprocal tariffs.
WTO information signifies the U.S. trade-weighted common tariff stands at 2.2%, while India’s is 12%. The USA maintains a $45.6 billion commerce deficit with India.
India goals to minimise the consequences of reciprocal worldwide tariffs deliberate by the US President Donald Trump from April 2, which has prompted market uncertainty and anxious policymakers globally.
In line with an inside evaluation, two authorities officers knowledgeable Reuters that such reciprocal tariffs would have an effect on 87% of India’s exports to america, value $66 billion. Each sources mentioned that India is ready to decrease tariffs on 55% of American imports at present topic to five%-30% duties.
Additionally Learn | ‘India is considerably insulated…’: Fitch sees India GDP progress at 6.5% in FY26 amidst US tariff insurance policies
For this class, India is ready to considerably cut back or eradicate tariffs on imported American items valued above $23 billion, one supply revealed.
Throughout Prime Minister Narendra Modi’s go to to america in February, each international locations consented to provoke discussions geared toward attaining a swift commerce settlement and addressing their tariff dispute.
The Indian administration seeks to finalise an settlement earlier than the announcement of reciprocal tariffs. Brendan Lynch, Assistant U.S. Commerce Consultant for South and Central Asia, will head a delegation of American officers for commerce negotiations beginning Tuesday.
Authorities officers from India cautioned that lowering tariffs on greater than 50 % of American imports is contingent upon acquiring reduction from reciprocal taxation. The officers indicated that the choice to chop tariffs stays into consideration, with various approaches being explored, together with sector-specific tariff changes and item-by-item negotiations as an alternative of a broad discount.
India can also be exploring complete tariff reforms to cut back commerce obstacles throughout the board. Nonetheless, these discussions are preliminary and will not be instantly addressed throughout the talks with america, in accordance with one official.
Additionally Learn | Is a US recession coming? 7 charts that present the plight of the American economic system
Trump has persevered in labelling India as a “tariff abuser” and “tariff king”, declaring his intention to impose tariffs universally.
In line with two sources, India anticipated 6% to 10% will increase in duties on varied objects together with pearls, mineral fuels, equipment, boilers and electrical gear, which represent 50% of its US exports, as a consequence of reciprocal taxation.
A second official indicated that pharmaceutical and automotive exports, valued at $11 billion, may face vital disruption from reciprocal tariffs, given their US market reliance. The official famous that Indonesia, Israel and Vietnam may emerge as various beneficiaries.
A 3rd authorities consultant confirmed that current tariffs on meat, maize, wheat and dairy merchandise, at present starting from 30% to 60%, stay non-negotiable. Nonetheless, duties on almonds, pistachio, oatmeal and quinoa could be lowered.
In line with a fourth official, India will advocate for gradual reductions in vehicle tariffs, which presently exceed 100%.
Additionally Learn | Trump tariffs affect: Is a US recession probably and does India want to fret about it?