India is ready to cut tariffs on more than half of its imports from the United States, worth $23 billion, in the first phase of a trade deal between the two countries. This was revealed by two government sources quoted by "Reuters", reports BTA.
This would be the largest tariff reduction in years, aimed at ending reciprocal tariffs between the countries. The Indian government is aiming to cushion the impact of trade measures that threaten to take effect on April 2 after US President Donald Trump imposed retaliatory tariffs on a number of countries, including India.
According to an internal analysis in New Delhi, these reciprocal tariffs will affect 87% of India's exports to the United States, which amount to $66 billion.
Under the terms of the agreement, India is ready to reduce tariffs on 55% of goods imported from the United States, which currently fall under trade restrictions ranging from 5% to 30%. For goods worth more than $23 billion, India can significantly reduce tariffs or even eliminate them altogether.
According to data from the World Trade Organization, the average customs duty in the US is about 2.2%, while in India it is significantly higher - about 12%. The United States has a trade deficit with India of $45.6 billion.
The trade deal was launched during Prime Minister Narendra Modi’s visit to the United States in February. The two sides agreed to begin talks on an early trade deal and resolve differences over tariffs.
Indian officials want to reach an agreement before the reciprocal tariffs go into effect. Starting April 2, Assistant U.S. Trade Representative for South and Central Asia Brendan Lynch will lead a delegation of officials for trade talks.
Indian government officials have said that reducing tariffs on more than half of U.S. imports is contingent on securing exemptions from these trade restrictions. Other options are being discussed, such as sectoral tariff adjustments and negotiations on a product-by-product basis, rather than a broad reduction.
Although Prime Minister Modi congratulated Trump on his election victory, the US president has not backed down from his proposed trade measures. Indian analysts predict that tariffs on products such as pearls, mineral fuels, machinery and electrical equipment, which account for half of India's exports to the US, will rise by between 6% and 10% due to the reciprocal taxes imposed.
“The Modi government has so far shown no strong desire for the kind of broad tariff cuts that Trump is seeking,“ said Milan Vaishnav, an expert on South Asian politics and economics at the Carnegie Endowment for International Peace.“