Media: India offers major tariff cuts in bid for US trade exemption

India has offered to cut its average tariff gap with the US to below 4% from nearly 13% in exchange for exemption from current and future tariffs imposed by President Trump.

The proposal would see the unweighted average tariff gap, calculated across all goods, narrow by nine percentage points, Caliber.Az reports, citing Reuters.

If accepted, it would significantly reduce trade barriers in the world's fifth-largest economy as New Delhi and Washington push to finalise a broader trade agreement.

The United States is India's largest trading partner, with bilateral goods trade amounting to around $129 billion in 2024. India currently maintains a trade surplus of $45.7 billion with the U.S.

Washington's trade posture under Trump has remained protectionist. Last month, the White House paused plans to impose reciprocal tariffs on several trading partners, including a 26% levy on Indian goods, while negotiations continue. However, a 10% base tariff remains in place for India and many others during the interim.

Last week, Trump announced a preliminary trade agreement with Britain, which cut average British tariffs on U.S. goods but retained the 10% U.S. tariff on British exports. That arrangement is seen as a potential model for upcoming talks with other partners, including India and Japan.

India has proposed eliminating tariffs entirely on 60% of its tariff lines in the first phase of the agreement, two Indian officials familiar with the discussions said. In total, India is offering preferential access, through lower or zero tariffs, on about 90% of U.S. imports.

This would include easing import barriers for high-value American exports such as aircraft, luxury and electric vehicles, telecom gear, medical equipment, hydrocarbons, wines and spirits, berries, prunes, animal feed and specialised chemicals.

In exchange, India is seeking exemptions from U.S. tariffs and preferential market access for key domestic sectors. These include gems and jewellery, leather, apparel, textiles, chemicals, plastics, oilseeds, and horticultural exports like bananas and grapes.

“Preferential market access for Indian exports would offer better trading terms relative to other U.S. partners,” one of the officials said.

India has also requested that it be granted similar status to close U.S. allies—such as the UK, Australia and Japan—in critical technology fields, including artificial intelligence, telecoms, biotechnology, semiconductors, and pharmaceuticals. However, U.S. technology transfer policies have long been constrained by internal regulations.

A delegation of Indian officials is expected to travel to the United States later this month to advance the discussions. Trade Minister Piyush Goyal may also join, although his visit has not yet been confirmed, a separate official said.

By Aghakazim Guliyev