India Plans Tariff Cuts on 30 Imported Items to Avoid US Trade Retaliation

New Delhi, Feb 12 (KNN) India is exploring the possibility of reducing tariffs on over 30 imported items while increasing its purchases of US defence and energy products to prevent higher reciprocal tariffs from the United States, according to a report by Nomura.

The move comes as part of India's broader strategy to avoid trade disputes with the US, a key economic partner.

In its recent Union Budget, the Indian government already lowered import duties on various products, including electronics, textiles, and high-end motorcycles. Further reductions are being considered for luxury vehicles, solar cells, and chemicals.

The report highlights concerns that if India does not lower its higher tariffs on American goods, Washington may impose similar duties on Indian exports.

For instance, if India maintains a 25 per cent tariff on US automobiles, the US could introduce an equivalent tariff on Indian vehicles.

Former US President Donald Trump has previously criticised India's trade policies and pushed for "reciprocal tariffs" to ensure fair trade treatment for American products.

India's trade surplus with the US has been increasing, reaching nearly USD 38 billion in 2024. The US is India's largest export market, accounting for about 18 per cent of its total exports, which contributed approximately 2.2 per cent to India’s GDP in FY24.

Major Indian exports to the US include industrial machinery, gems and jewellery, pharmaceuticals, fuels, iron and steel, textiles, vehicles, and chemicals.

In addition to tariff reductions, India has also taken diplomatic steps to strengthen ties with Washington, such as agreeing to repatriate over 100 illegal Indian immigrants.

Prime Minister Narendra Modi is set to meet former President Trump in Washington on Friday to discuss trade policies and explore ways to maintain stable economic relations between the two nations.

(KNN Bureau)