India Weighs Tariff Cuts to Avoid US Trade Penalties

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New Delhi, Feb 28 (KNN) New Delhi is exploring significant tariff reductions on a range of imports, including automobiles, chemicals, and electronics, in a bid to avoid US President Donald Trump’s proposed reciprocal tariffs, sources familiar with the matter revealed.

Officials are discussing lowering duties on key US exports such as agricultural products, pharmaceuticals, and medical devices.

This move would go beyond the recent tariff cuts on high-end motorcycles and bourbon whiskey, which were primarily symbolic gestures toward Trump’s administration.

India aims to finalise a trade deal with the US by fall, a target set during the Modi-Trump summit earlier this month. Although the agreement is unlikely to be ready before April—when Trump’s tariffs might take effect—India hopes that progress on negotiations will prevent their imposition.

New Delhi is considering multiple approaches to tariff reductions, including broad-based cuts or a sector-specific strategy.

The Ministry of Commerce and Industry has formed a committee to assess the impact of potential reciprocal tariffs, consulting with various stakeholders. However, some sectors, like dairy, are unlikely to see any reductions.

The initiative underscores India’s determination to maintain strong trade ties with its largest partner while responding to US demands for a more balanced trade relationship.

The US has expressed interest in selling more energy, weapons, and industrial goods to India—sectors where Russia currently holds a significant market share.

Despite India’s willingness to adjust tariffs, concerns remain about a potential influx of cheap Chinese imports harming domestic industries.

To mitigate this risk, officials are considering non-tariff measures such as stricter quality standards and anti-dumping duties.

At the recent summit, both nations reaffirmed their commitment to enhancing bilateral trade, targeting an increase from USD 127 billion in 2023 to USD 500 billion by 2030.

The US continues to strengthen its economic ties with India, viewing it as a crucial ally in countering China’s growing influence in the region.

(KNN Bureau)



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