Indian Prime Minister Narendra Modi is preparing additional tariff cuts ahead of a meeting this week with US President Donald Trump that could boost US exports to India and avoid a potential trade war, Indian government officials said.
Modi’s two-day US visit from tomorrow comes as Trump plans to announce reciprocal tariffs on many countries, including tariffs of 25 percent on all steel and aluminum imports.
Trump has previously called India a “very big abuser” on trade and urged it to buy more US-made security equipment to move toward a fair two-way trading relationship.
Photo: Reuters
India is considering tariff cuts in at least a dozen sectors, from electronics to medical and surgical equipment, and chemicals, to boost US exports in line with New Delhi’s domestic production plans, three government officials said.
Trade ties between the two nations have grown steadily over the last decade, with Washington increasingly viewing New Delhi as a counterbalance to China’s growing regional influence.
“This visit will be an opportunity to build upon the successes of our collaboration in his [Trump’s] first term,” Modi said in a statement yesterday.
He added that technology, trade, defense, energy and supply chain resilience were areas in which the partnership could be elevated and deepened.
Concessions were being considered on items that India primarily sources from the US or has more potential appetite to buy, such as dish antennas and wood pulp, the officials said.
Two-way trade exceeded US$118 billion in fiscal 2023-2024, with India posting a surplus of US$32 billion.
Modi is expected to discuss tariffs with Trump and India is open to discussing a possible mini trade deal, two government officials said.
His early visit aims to avoid a “trade war-like situation that is happening between the US and China,” a third official said.
Trump has already slapped sweeping tariffs of 10 percent on imports from China, spurring Beijing to respond with duties on US energy.
The discussions on tariff concessions come after India cut average import tariff rates to 11 percent from 13 percent on several items, besides reducing taxes on high-end bikes and luxury cars.
India is also reviewing surcharges on more than 30 items, including luxury cars and solar cells.
Nearly one-fifth of India’s exports of engineering goods — comprising steel and aluminum and worth about US$25 billion — are at risk if Trump adopts the proposed 25 percent tariff, an official of an industry body said.
“We are in a wait-and-watch mode and hope the issue can be amicably resolved during Prime Minister Narendra Modi’s visit,” the official said.
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