As part of a trade deal being negotiated between the two countries, the Indian government is opening its arms to cut tariffs on more than half of US imports which is said to be worth USD 23 billion. This has been brought to light by news agency Reuters, citing two government sources. If this takes off, it would be one of the biggest tariff cuts in years. This tariff cut would be aimed at preventing reciprocal tariffs that could hurt exports.
Furthermore, the government is also trying to reduce the impact of US President Donald Trump's global reciprocal tariffs, which is expected to take effect from April 2. These new tariffs have clearly disrupted the global markets and has created concerns across numerous countries which encompasses some of the US's Western allies as well.
As per an internal analysis by India, the new US tariffs could impact 87 percent of Indian exports to the US, and is worth around USD 66 billion. This was relayed by two government officials to a credible source. Furthermore, India is open to lowering tariffs on 55 percent of US imports that are currently taxed between 5% and 30%. This is carried out to avoid this impact. Also to note, some tariffs are expected to be reduced significantly, while others may be removed entirely.
However, this proposal is still under discussion, and Indian government officials have not made any final decision as of now. Adding to this, other options being explored also include adjusting tariffs for specific sectors and won’t spread across broad tariff cuts. There is also some negotiation going on for reductions pertaining to some selected products rather than reducing tariffs across multiple industries.
A US delegation, which would be led by Brendan Lynch, Assistant US Trade Representative for South and Central Asia, is said to visit India for trade talks starting Tuesday. Also to note, the Indian government is trying to finalise a deal before the US reciprocal tariffs come into effect.
