Trump’s Threat To Take Effect? India Considers Reducing Tariffs On US Imports To Prevent Damage To Crucial Exports

As the date of imposition of US 'reciprocal tariffs' on India approaches, the country is considering reducing tariffs on over half of US imports valued at $23 billion, according to two government sources cited in the Economic Times report.

According to two government insiders who spoke to Reuters, an internal assessment by New Delhi projected that the proposed mutual tariffs could impact 87 per cent of its total exports to the US, valued at $66 billion.

According to anonymous sources, as part of the agreement, India is willing to cut down tariffs on 55 per cent of US goods currently imported with tariffs varying between 5 to 30 per cent.

Notably, the US experiences a trade deficit amounting to $45.6 billion with India. This significant reduction of tariffs on imports, the largest in years, is intended to prevent the imposition of mutual tariffs which can hamper India's exports.

India is prepared to significantly reduce tariffs, or even eliminate some altogether, on imports valued over $23 billion from the US, according to one source within this category of goods.

On the whole, data from the World Trade Organisation demonstrates that the average tariff in the US, when adjusted for trade weight, stands at approximately 2.2 per cent, in contrast to India's 12 per cent.

In February, while on his visit to the US, Prime Minister Narendra Modi and the American authorities reached a consensus to initiate discussions aimed at securing a prompt trade agreement and settling their ongoing tariff disputes.

Before the imposition of reciprocal tariffs on 2 April, New Delhi is keen on finalising a deal. Brendan Lynch, the Assistant US Trade Representative for South and Central Asia, will spearhead a delegation of officials from the US for trade discussions starting Tuesday.