India proposes major tariff cut to secure trade deal with U.S.

India has proposed a steep reduction in average tariffs on U.S. goods - from nearly 13% to under 4% - in a strategic move to secure exemption from current and future tariff hikes under President Donald Trump, according to Indian officials familiar with the talks.

India is prepared to significantly narrow its tariff gap with the United States, offering to reduce the average tariff differential from nearly 13% to less than 4%, sources revealed. The proposal aims to secure relief from President Donald Trump’s current and planned tariff increases as both nations accelerate efforts to finalize a trade agreement.

This potential 9-percentage point cut would mark one of India’s most sweeping reforms to lower trade barriers and comes amid Trump's global push for more reciprocal trade terms. The United States is India’s top trading partner, with bilateral trade totaling around $129 billion in 2024. India currently holds a $45.7 billion surplus in the trade relationship.

Trump recently secured what he called a “breakthrough deal” with the UK, keeping a 10% base U.S. tariff on British imports while reducing UK tariffs on American goods - an approach that may shape upcoming deals with other partners, including India.

India is now among the top candidates - along with Japan - to conclude a trade agreement during the Trump administration’s 90-day pause on broader reciprocal tariffs. As part of its current offer, New Delhi has proposed reducing duties to zero on 60% of tariff lines and providing preferential access on 90% of goods imported from the U.S., an official said.

Details of India’s comprehensive tariff offer, and what it expects in return from Washington, had not been made public until now. A delegation of Indian trade officials is expected to travel to the U.S. later this month to continue talks, with a possible visit by Trade Minister Piyush Goyal under consideration.

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