The proposed tariff cuts would represent one of the most significant reductions in recent years. By lowering duties on a wide array of U.S. goods, New Delhi seeks to foster a more balanced trade relationship and avert punitive measures from Washington that could harm its export sectors.
The United States has been advocating for the elimination of tariffs on various products, including automobiles, under the proposed trade agreement. While India has shown openness to discussing reductions in industrial tariffs, it remains cautious about immediate eliminations, particularly in sensitive sectors such as agriculture, due to potential impacts on domestic industries.
In a related development, a parliamentary committee in India has recommended lowering import duties on raw materials to support local manufacturers. This move is intended to correct instances where tariffs on raw materials are higher than those on finished goods, thereby encouraging domestic production and enhancing competitiveness.
The backdrop to these negotiations includes the U.S. administration's consideration of reciprocal tariffs on countries with higher trade barriers, a policy that could significantly affect Indian exports. By proactively reducing tariffs on U.S. imports, India aims to demonstrate its commitment to fair trade practices and strengthen bilateral economic ties.
While these discussions are ongoing, industry stakeholders in India are closely monitoring developments. Exporters, particularly in sectors like engineering goods, are advocating for tariff reductions on key inputs to enhance their competitiveness in the U.S. market. They express concerns about potential U.S. tariffs on Indian products and emphasize the need for strategic measures to safeguard their interests.