Indian Prime Minister Narendra Modi is set to implement further tariff reductions prior to his meeting with U.S. President Donald Trump, a move that could enhance American exports to India and help avert a potential trade conflict, according to government officials.
Modi’s visit to the United States on Wednesday and Thursday coincides with Trump’s intention to announce reciprocal tariffs affecting numerous countries, a strategy designed to realign global trade dynamics in favor of the U.S.
While Trump has not detailed which nations will be impacted, he has previously labeled India as a “very big abuser” in trade matters and emphasized the need for India to increase its purchases of American-made security products to foster a more equitable trading relationship.
India is contemplating tariff cuts across at least a dozen sectors, including electronics, medical and surgical equipment, and certain chemicals, to facilitate increased U.S. exports. These potential reductions are in line with New Delhi’s domestic production initiatives, as noted by three government officials.
The officials, who requested anonymity, indicated that concessions are being evaluated for products that India predominantly imports from the U.S. or has the capacity to acquire more of, such as dish antennas and wood pulp. Modi is anticipated to address tariff issues with Trump next week, and India is receptive to discussing a possible mini trade agreement.
This early visit aims to prevent a “trade war-like situation similar to that between the U.S. and China,” according to a third official. Trump has enacted broad 10% tariffs on Chinese imports, leading to retaliatory measures from Beijing on American energy products.
Officials chose to remain anonymous as they are not authorized to communicate with the media. The trade ministry, foreign affairs ministry, and the Prime Minister’s Office in India did not reply to requests for comments sent outside of official working hours.
The discussions regarding tariff concessions come in the wake of a decrease in India’s average import tariff rates from 13% to 11% on various items as outlined in the annual budget, along with reductions in taxes on high-end motorcycles and luxury vehicles.
Additionally, India is assessing surcharges imposed on over 30 products, including luxury cars and solar panels.
The forthcoming meeting between Modi and Trump will address trade, defense collaboration, and technology, although it has been somewhat overshadowed by the recent deportation of Indian nationals from the United States.
One official indicated that the meeting is expected to provide political guidance for the bilateral relationship, with more detailed discussions on tariffs anticipated to occur after the visit.
Despite Trump’s critiques of India’s trade policies, he has referred to Modi as “fantastic.” The United States remains India’s largest trading partner, with bilateral trade exceeding $118 billion in 2023/24, resulting in a surplus of $32 billion for India.
Over the past decade, trade relations between the two countries have steadily strengthened, with Washington increasingly recognizing New Delhi as a counterweight to China’s expanding influence in the region.
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