India plans tariff cuts on U.S. imports ahead of trade talks

Investing.com -- In anticipation of upcoming trade talks with the U.S., India is preparing to offer tariff reductions on a selection of goods that are primarily imported from the U.S., according to government and industry sources in New Delhi. This move is aimed at securing a wider trade and investment deal once president-elect Donald Trump assumes office.

To counter Trump's potential "reciprocal tax" on Indian products due to high tariffs, officials from the Indian commerce ministry are considering tariff cuts on certain items such as pork. At present, India imposes approximately a 45% import tariff on pork, a product that is predominantly supplied by the U.S.

The officials are also considering lowering tariffs on high-end medical devices like pacemakers and luxury motorcycles, including Harley Davidson. Currently, these products are subjected to tariffs ranging from 25% to 60%, according to an official with direct knowledge of trade issues.

In the fiscal year of 2023/24 ending in March, bilateral trade between India and the U.S. surpassed $118 billion. With India having a trade surplus of $32 billion, the country is gearing up for trade discussions with the U.S., aiming to secure a broader trade and investment agreement once president-elect Donald Trump takes office.

To address Trump's concerns about the trade imbalance, Indian officials have proposed to increase their purchases of LNG and defense equipment from the U.S., as per the second official.

India's energy imports from the U.S., encompassing crude oil , refined fuel, and coal, were estimated at $12 billion in fiscal 2024, along with aircraft and parts worth $2 billion. These imports could potentially increase by $5 billion to $10 billion annually, a third government source stated.

The government and industry sources requested anonymity due to the confidentiality of the discussions. A spokesperson from the commerce ministry declined to comment on the matter.

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Source: Investing.com