India’s Tariff Reduction Proposal
India has proposed to cut its tariff gap with the United States from 13% to under 4%. This offer is aimed at securing an exemption from President Donald Trump’s potential tariff hikes as both countries rush to finalize a trade deal. The proposal would reduce the average tariff differential by 9 percentage points.

Bilateral Trade Between India and the U.S.
The United States is India’s largest trading partner, with bilateral trade reaching $129 billion in 2024. India holds a $45.7 billion trade surplus with the U.S., making this deal significant for both countries. This offer marks a crucial step in strengthening U.S.-India trade relations.

U.S. Approach to International Trade Deals
President Trump’s recent trade deal with the United Kingdom has lowered British tariffs on U.S. goods, while maintaining a 10% base tariff. This deal sets a precedent for future agreements, including the ongoing negotiations with India. Trump has also paused plans to impose reciprocal tariffs, such as the 26% tariff on Indian goods, while trade discussions are underway.

India’s Tariff Reduction Plan
India has proposed reducing tariffs to zero on 60% of tariff lines in the first phase of the agreement. Additionally, India is offering preferential access to 90% of U.S. imports, which will enhance bilateral trade and create opportunities for both nations.

Key Export Sectors Seeking Preferential Access
India is seeking preferential market access for key export sectors, including:

• Gems and jewelry
• Leather
• Textiles
• Chemicals
• Oilseeds
• Shrimp

These sectors would benefit from better trade terms with the U.S. compared to other countries.

Regulatory Changes for U.S. Exports
To sweeten the deal for the U.S., India has proposed easing export regulations on several high-value U.S. products, such as:

• Aircraft and parts
• Luxury cars
• Medical devices
• Telecom equipment

These regulatory changes would benefit U.S. businesses and improve trade conditions for both countries.

Collaboration in Technology Sectors
India is also seeking to be treated equally to U.S. allies like Japan, Australia, and the UK in critical technology sectors such as AI, semiconductors, and biotech. This would open new avenues for collaboration and growth in the technology field.

Next Steps in the Trade Negotiations
A delegation of Indian officials is set to visit the U.S. later this month to continue the trade discussions. India’s Trade Minister, Piyush Goyal, may also join the negotiations, though his participation has not been confirmed yet. This agreement has the potential to strengthen the economic ties between India and the U.S. and reshape global trade relations.