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India has proposed a significant reduction in tariffs to advance a trade agreement with the United States under President Donald Trump.
The offer includes lowering the average tariff gap between Indian and U.S. exports from nearly 13% to under 4%, marking one of India’s most comprehensive tariff reforms. This move aims to secure relief from U.S. tariffs and finalize a bilateral trade deal.
In exchange, India seeks preferential market access for key export sectors such as gems and jewellery, textiles, chemicals, and agricultural produce. Additionally, India desires full tariff exemptions on its exports and aims to ease export regulations for high-value U.S. goods, including aircraft, luxury cars, and medical devices. India also seeks to be treated on par with top U.S. allies like Britain and Japan in sectors such as AI, biotech, and semiconductors.
The urgency of these negotiations is heightened by the impending expiration of a 90-day exemption from a proposed 26% U.S. tariff on Indian imports, which was announced by President Trump to address the $45.7 billion trade deficit with India. India’s proactive approach contrasts with other nations that have shown less interest in negotiating under the current U.S. trade policies.
Analysts note that while India has historically maintained protective trade policies, the current economic climate and the desire to attract global investment have prompted a shift toward more open trade practices. The proposed tariff reductions and market access agreements are seen as steps to enhance India’s economic growth and strengthen its trade relationship with the United States.
As negotiations progress, both nations aim to finalize the trade agreement promptly, with an Indian delegation expected to visit the U.S. later this month to advance discussions. The outcome of these talks could set a precedent for future U.S. trade agreements and signal a new phase in U.S.-India economic relations.
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