India Proposes Major Tariff Reduction to Strengthen US Trade Relations
India plans to cut its tariff gap with the U.S. to less than 4% from 13% in hopes of gaining exemptions from U.S. tariff hikes. The initiative aims to lower trade barriers and promote preferential market access, benefiting key Indian export sectors while expecting similar U.S. concessions.
In a strategic move to fortify economic ties, India has offered to drastically reduce its tariff differential with the United States from nearly 13% to under 4%. This significant decrease is part of India's bid for tariff exemption from President Donald Trump's present and potential future tariff hikes.
The proposal could lead to one of the most comprehensive changes in India's trade barriers, marking a reduction of 9 percentage points in average tariff gaps. As the US stands as India’s largest trading partner with a bilateral trade of approximately $129 billion in 2024, the trade dynamics currently favor India with a $45.7 billion surplus.
India has tabled a robust offer to grant preferential access to 90% of American imports, alongside plans to eliminate tariffs on 60% of tariff lines during the negotiation's first stage. This comes amid ongoing negotiations where India seeks favorable trade terms for major exports and an equitable stance in dependency on high-value US commodities.
(With inputs from agencies.)
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