India May Cut Tariffs on $23B of US Imports Ahead of Trump's April 2 Deadline

India could cut tariffs on $23 billion worth of US imports to prevent the reciprocal taxes announced by President Donald Trump, Reuters reported, citing sources.This would be India's biggest efforts toward tariff reductions to safeguard its exports to the U.S. assuming the deadline has been kept for April 2 for the imposition of the new tariffs.

According to the statement, the government of India is considering lowering tariffs on some US imports in an effort to nullify the impact of US President Trump's global reciprocal tariffs. Such tariffs have created problems in the market and raised issues for many countries, some of which are allies of the US.

Effect on Indian Exports

The Indian government views an internal assessment, which shows that about 87% of Indian exports to the US, with a total value of about $66 billion, will be hit by the new US tariffs as government sources told Reuters.

In this regard, India is willing to undertake tariff cuts on 55% of American imports, which is currently between 5% and 30% of import tariffs, according to the report by Reuters. For some, the tariff cut will be huge; for others, repeal altogether.

The proposal is still under debate, and no final decision has been made. They are also looking at other alternatives, such as targeting what items would get tariff reductions by sector, instead of making blanket cuts across the industry. There is also a consideration by India to negotiate across products, instead of across all products, as reported by Reuters.

Beginning Tuesday, a US delegation under Brendan Lynch, Assistant US Trade Representative for South and Central Asia, will visit India for trade talks. A timely agreement should be sealed with the Indian government before the imposition of US tariffs.

Historical Trade Disputes and Tariff Comparisons

The United States and India have seen their share of trade negotiations. According to data from the World Trade Organization (WTO), an average trade-weighted tariff in the United States amounts to 2.2%, whereas India's is pegged at 12%. The US is currently facing a trade deficit of $45.6 billion against India.

In February, during Prime Minister Modi's visit to the US, it was decided that negotiations for an early trade deal would be initiated to settle tariff disputes. Nonetheless, according to officials who spoke to Reuters, India's concessions on lowering tariffs would be contingent upon reciprocal concessions by the United States.

Products Being Considered for Tariff Reductions

According to the Reuters report, India is considering reducing tariffs on products such as:

• Almonds
• Pistachios
• Oatmeal
• Quinoa

However, India has stated that it will not lower tariffs on:

• Meat
• Maize
• Wheat
• Dairy products

Tariffs on automobiles, currently exceeding 100%, may be gradually reduced instead of being cut immediately.

Sectors at Risk

The Indian government is worried that US reciprocal tariffs could severely affect critical export sectors, including:

• Pharmaceuticals
• Automobiles
• Electrical equipment
• Machinery

In the report of the government sources, it was mentioned that tariffs on Indian products such as pearls, mineral fuels, and machinery might increase by 6%-10% and cover almost one-half of India's total export to the US. Such an eventuality means that after that, US companies will resort to other suppliers from countries like Indonesia, Israel, and Vietnam, harming the Indian export market.

India's Position on Trade Talks

Sunil Barthwal, India's Trade Secretary, reportedly informed a parliamentary committee on March 10 that while India will strengthen trade ties with the US, it will not sacrifice national interests in the words of two sources cited by Reuters. Meanwhile, US Commerce Secretary Howard Lutnick even urged India to consider comprehensive tariff cuts, especially after the country decided to lower duties on high-class motorcycles and the bourbon whisky that demonstrated a cut from the earlier situation.