India is considering a reduction in tariffs on over half of U.S. imports valued at $23 billion as part of the initial phase of an ongoing trade agreement negotiation. According to Reuters, this move aims to counteract the impending reciprocal tariffs announced by the U.S. administration, which could significantly impact Indian exports.
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Data from IndexBox indicates that India’s trade-weighted average tariff stands at 12%, notably higher than the U.S. average of 2.2%. The United States currently faces a trade deficit of $45.6 billion with India. The proposed tariff reductions could affect goods currently taxed between 5% and 30%, with India open to substantial cuts or even complete elimination of tariffs on certain products.
Negotiations are ongoing, with India seeking to finalize a deal before the U.S. implements its reciprocal tariffs. The talks, led by Assistant U.S. Trade Representative Brendan Lynch, are crucial as India aims to protect its $66 billion worth of exports to the U.S., which could be severely affected by the new tariffs. While India is willing to negotiate on various goods, it has set firm boundaries on essential items like meat, maize, wheat, and dairy products, which currently have tariffs ranging from 30% to 60%. However, there may be room for easing tariffs on products such as almonds, pistachios, oatmeal, and quinoa.
The potential tariff cuts could also open opportunities for alternative suppliers like Indonesia, Israel, and Vietnam, should the U.S. impose its planned tariffs. India’s strategic approach to the negotiations reflects its desire to maintain a strong trading relationship with the U.S. while safeguarding its national interests.
