US May Roll Back Penal Tariffs on Indian Goods, Says CEA

Chief Economic Adviser (CEA) V. Anantha Nageswaran on Thursday expressed optimism while speaking at an event, that the United States will soon roll back the penal tariffs imposed on Indian goods. He also indicated that reciprocal duties levied by India on US products may be pared down in the coming weeks, potentially easing the pressure on exporters hit hard by steep levies.

Possible Reduction in Reciprocal Duties

The CEA noted that the reciprocal duty, which currently stands at 25%, may be reduced to a range of 10–15%. He added that a resolution to the ongoing tariff dispute could materialise within the next 8–10 weeks. However, he clarified that this was his personal assessment rather than an official assurance.

Trade Talks with the United States

The remarks follow a recent meeting between Commerce Ministry’s Special Secretary Rajesh Agrawal and Brendan Lynch, the US Trade Representative for South and Central Asia, in New Delhi. This was the first in-person discussion since the US imposed additional tariffs on Indian exports last month, citing India’s continued energy trade with Russia.

Impact on Indian Exporters

The dual-layered tariff regime has left several Indian goods facing duties of up to 50%. Sectors such as textiles, engineering goods, and food products have been particularly affected, with exporters struggling to absorb higher costs and shrinking margins.

Outlook for Resolution

While Nageswaran highlighted that the government remains hopeful, he also stressed that preparations are underway for multiple possible outcomes. Exporters and industry stakeholders are now watching closely to see if the US follows through on rolling back the tariffs by the end of November and whether reciprocal duties will be eased.

Read More: US rejects India's request for WTO talks on copper

Conclusion

The expectation of a rollback in penal tariffs and a reduction in reciprocal duties could provide much-needed relief for Indian exporters. If realised, this development may mark a turning point in the ongoing trade tensions and improve prospects for labour-intensive industries reliant on access to the US market.

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