India proposed slashing its average tariff gap with the United States by two-thirds—from 13% to under 4%—in a bold bid to secure an exemption from President Donald Trump’s “current and potential” tariff hikes, according to Reuters.
The offer, part of accelerated negotiations to finalise a trade deal, marks one of the most significant efforts to dismantle trade barriers in the world’s fifth-largest economy.
The proposal aims to reduce the unweighted average tariff differential across all products by 9 percentage points. In exchange, India seeks blanket immunity from Trump’s protectionist measures, including a paused 26% reciprocal tariff, while a 10% base duty remains in place during talks.
The move comes as Washington intensifies its “America First” agenda, recently sealing a template-setting deal with Britain that retains a 10% US base tariff on UK goods.
With bilateral trade hitting $129 billion in 2024—and India enjoying a $45.7 billion surplus—New Delhi offered preferential access to 90% of US imports, including zero duties on 60% of tariff lines in the deal’s first phase. This includes eased regulations for high-value American exports such as aircraft parts, luxury cars, telecom equipment, and pharmaceuticals.
However, India’s requests go beyond tariffs. It has demanded preferential market terms for key exports like gems, textiles, seafood, and horticultural products to outcompete rivals.
New Delhi also seeks parity with top US allies like Britain and Japan in critical technology sectors, including AI, semiconductors, and biotech. While Washington has shown interest in sharing advanced tech, restrictive US policies remain a hurdle.
A delegation led by Trade Minister Piyush Goyal is expected in Washington later this month to advance talks. The urgency reflects Trump’s 90-day tariff pause, with India and Japan vying to finalise deals after the UK.
