As the Indian government begins groundwork for a proposed trade deal with the U.S., it has expressed openness to bilateral tariff reductions under the Trump administration. However, officials argue that with China as an “aggressive neighbor,” India cannot lower duties across the board for all trading partners. Instead, the government is aiming for favorable terms on services and business visas.
Amid repeated remarks by U.S. President Donald Trump on India’s “high tariffs,” sources emphasized that India’s average tariff rate—around 17% and declining—remains well below its World Trade Organization (WTO) commitment, which allows for duties of up to 50%.
While the Commerce Ministry has begun consultations with other government departments, it is awaiting the formal appointment of the U.S. trade team. Officials are closely monitoring how the U.S. pursues its policy of reciprocal tariffs and have dismissed various speculative reports, including those from global financial institutions.
India Weighs Its Tariff Strategy
Officials from the commerce and revenue departments are analyzing tariff structures at both macro and micro levels to craft India’s negotiating stance. While India has already reduced tariffs on bourbon whiskey and motorcycles—a move that benefits American brands like Harley-Davidson—the U.S. is pressing for further concessions.
However, Indian negotiators are keeping their strategy under wraps to avoid revealing their hand. The final stance will depend on how the U.S. structures its reciprocal tariff approach—whether it is country-specific, product-specific, or includes additional non-tariff barriers. Reports suggest that any U.S. assessment of Indian tariffs may be followed by an investigation before further action is taken.
