India is reportedly considering significant tariff cuts on $23 billion worth of American imports to avoid steep reciprocal taxes threatened by President Trump.
The reciprocal tariffs are set to take effect on April 2.
The South Asian nation faces pressure as the Trump administration prepares to impose tariffs that would impact a staggering 87% of India’s exports to the United States—totaling around $66 billion, according to government sources cited by Reuters.
Under the proposed plan, India could slash tariffs currently ranging from 5% to 30% on roughly 55% of U.S. imports, including machinery and electrical equipment.
Officials in New Delhi believe this move could help avoid Trump’s “Liberation Day” tariffs, designed specifically to punish countries viewed as “trade abusers.”
The Trump administration has repeatedly labeled India as a “tariff abuser,” highlighting that India’s trade-weighted average tariff stands at 12%. This is substantially higher than America’s 2.2%.
The U.S. currently maintains a $45.6 billion trade deficit with India, something President Trump has pledged to address aggressively.
India’s concessions follow recent tariff reductions on motorcycles and bourbon whiskey—although bourbon tariffs remain exceptionally high, lowered from 150% to 100%.
Despite these efforts, Indian Trade Secretary Sunil Barthwal has made clear India won’t compromise on what it sees as national interests, particularly refusing to lower tariffs on sensitive agricultural goods like meat, maize, wheat, and dairy.
Still, Trump’s threats appear to have forced New Delhi’s hand, pushing them toward broader reforms.
Indian officials are even discussing phased cuts to automobile tariffs, currently among the highest globally at 110%, a rate criticized by Trump ally Elon Musk.
Meanwhile, a delegation led by Brendan Lynch, assistant U.S. trade representative for South and Central Asia, is scheduled for trade talks with Indian counterparts starting Tuesday, signaling ongoing negotiations.
Commerce Secretary Howard Lutnick urged India to “think big,” suggesting the administration expects substantial concessions.
If India fails to reach an agreement, the reciprocal taxes from the U.S. could range between 6% to 10% on crucial Indian exports. This could open the door for alternative suppliers like Indonesia, Israel, and Vietnam to benefit at India’s expense.
President Trump has emphasized a friendly but firm relationship with Indian Prime Minister Narendra Modi, even as he insists America will no longer tolerate uneven trade relationships.