New Delhi | February 10, 2025
As Indian Prime Minister Narendra Modi prepares for his two-day visit to the United States, his government is finalizing additional tariff reductions aimed at expanding American exports to India and averting potential trade tensions with Washington, senior government officials said.
The move comes as U.S. President Donald Trump plans to introduce reciprocal tariffs on multiple countries, a measure intended to rebalance global trade in favor of the U.S. While Trump has not yet specified which nations would be targeted, he has previously criticized India as a “very big abuser” in trade and urged greater Indian purchases of American security equipment.
India Weighs Tariff Cuts in Key Sectors
New Delhi is reportedly considering tariff reductions across at least a dozen sectors, including:
- Electronics
- Medical and surgical equipment
- Chemicals
- Dish antennas
- Wood pulp
These concessions align with India’s domestic manufacturing goals and could help raise U.S. exports to India, officials familiar with the matter said. The reductions follow India’s recent budget decision to lower its average import tariff rates from 13% to 11% on select items, as well as tax cuts on luxury cars and high-end motorcycles.
Officials also revealed that India is reviewing surcharges on over 30 imported goods, including solar cells and high-end vehicles.
“The goal is to prevent a trade war-like situation, similar to what has happened between the U.S. and China,” said one senior government official, speaking on condition of anonymity.
Modi-Trump Meeting to Set Trade, Defense Agenda
During their discussions in Washington, D.C., Modi and Trump are expected to focus on:
- Expanding trade and investment ties
- Strengthening defense cooperation
- Technology and AI collaboration
- Addressing market access barriers
While the meeting is expected to lay the groundwork for a potential mini trade deal, detailed negotiations on tariffs and regulatory alignment will likely continue in the weeks ahead.
Despite Trump’s criticisms of India’s trade policies, he has also praised Modi as a “fantastic leader” and acknowledged the growing strategic partnership between the two nations.
“The meeting will provide political direction for U.S.-India ties, with further discussions on tariffs expected after the visit,” said another senior official.
Trade Ties Strengthening Amid Global Shifts
The United States remains India’s largest trading partner, with bilateral trade surpassing $118 billion in 2023-24. India continues to maintain a trade surplus of $32 billion with the U.S., a key issue in previous disputes between Washington and New Delhi.
While the Modi government seeks to ease trade friction, broader geopolitical dynamics—including Washington’s view of India as a counterbalance to China—have reinforced economic cooperation.
As Modi arrives in the U.S. this week, all eyes will be on whether concessions on tariffs and enhanced security ties can further solidify the strategic partnership between the world’s two largest democracies.
