India Proposes Zero Tariffs on US Steel and Auto Parts in Trade Discussions

India has proposed a zero-tariff arrangement on select imports from the United States, including steel, auto components, and pharmaceuticals. The offer is part of ongoing trade discussions between the two countries and was made during a visit by Indian trade officials to Washington in late April, according to a Bloomberg report.

Tariff Limits and Conditions

The proposal is structured around import quotas. Zero tariffs would apply only up to a specified volume. Once the threshold is crossed, India’s regular import duties would be reinstated. The zero-for-zero approach is based on reciprocity, with both sides expected to apply similar terms.

Timeline and Context

This follows the April 2 announcement by former US President Donald Trump of new tariffs – up to 26% on Indian exports. On April 9, Trump paused these tariffs for 90 days to allow time for trade negotiations. India’s offer is aimed at making progress within that window. A deal is being targeted before the July 9 deadline, though no official confirmation has been made.

Issues Around Quality Control Orders

The US has raised concerns about India’s Quality Control Orders (QCOs), which apply to both domestic and imported goods. These standards have increased significantly from 14 in 2014 to over 140 since 2017. The US considers them restrictive. Indian authorities have indicated they are open to reviewing some of these, especially in medical devices and chemicals. A mutual recognition agreement between regulatory systems has also been discussed.

Status of Trade Agreements

Despite ongoing discussions, no country has finalised a trade agreement with the US since the reciprocal tariffs were paused. US officials have continued talks with countries including Japan, South Korea, and those in Europe.

Read more: Nearly 30% of Indian Exports to US to Attract Tariffs Above 15%.

Conclusion

India’s proposal is part of efforts to secure limited tariff relief and push forward a bilateral trade agreement. Talks are still underway, and the outcome remains uncertain with the July deadline approaching.

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