India Considers Tariff Cuts on $23B US Imports to Protect $66B Exports

India’s Strategy to Address Reciprocal Tariffs

India is looking to mitigate the effects of U.S. President Donald Trump’s reciprocal tariffs, set to take effect from April 2. These tariffs are expected to disrupt global markets, prompting urgent responses from policymakers. Internal estimates suggest they could impact 87% of India’s total exports to the U.S., valued at $66 billion, as per news reports.

To offset these risks, India is considering reducing tariffs on 55% of U.S. imports currently subjected to duties between 5% and 30%. Some tariffs may be significantly lowered or removed altogether on goods exceeding $23 billion in value.

Trade Negotiations and Future Outlook

Following Prime Minister Narendra Modi’s visit to the U.S. in February 2025, both nations agreed to initiate discussions for an early trade deal to resolve tariff-related disputes. New Delhi is keen to finalise an agreement before the reciprocal tariffs take effect.

The U.S. maintains a trade deficit of $45.6 billion with India, with a trade-weighted average tariff of 2.2%, compared to India’s 12%. Assistant U.S. Trade Representative for South and Central Asia, Brendan Lynch, is set to lead a delegation for trade discussions from March 25, 2025.

Meanwhile, India is also exploring broader tariff reforms to lower trade barriers uniformly. However, these discussions remain in the early stages and may not be immediately addressed in talks with the U.S.

Conclusion

India’s move to reduce tariffs on U.S. imports reflects its efforts to safeguard exports and ease trade tensions. While the immediate focus is on securing a deal before the new tariffs take effect, broader trade policy reforms remain under consideration.

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