The Indian government is negotiating a trade deal with the United States to mitigate the impact of new reciprocal tariffs imposed by President Donald Trump, set to take effect on April 2. In a bid to avoid the damaging effects of these tariffs, which could potentially hurt Indian exports, the Indian government is considering a significant reduction in tariffs on over half of the US imports, totaling around $23 billion. This would represent one of the largest tariff cuts in recent years.

The new US tariffs have created significant concern globally, disrupting markets and raising alarms in countries including the US’s Western allies. India, in particular, faces the potential impact of these tariffs on its exports to the US, which are valued at approximately $66 billion. According to an internal analysis by the Indian government, these new tariffs could affect up to 87% of Indian exports to the US.

To counter this, India is considering reducing tariffs on 55% of US imports, which currently range from 5% to 30%. Some tariffs could be significantly reduced, while others might be completely eliminated. However, the proposal is still under discussion, and no final decision has been made. Other strategies under consideration include focusing on specific sectors or negotiating reductions on selected products instead of implementing a broad tariff cut.

A US trade delegation, led by Assistant US Trade Representative Brendan Lynch, is set to visit India for talks beginning Tuesday. The Indian government is aiming to finalize a deal before the US reciprocal tariffs come into effect.

India’s willingness to reduce tariffs is contingent on the US easing its own reciprocal tariffs. While India may consider tariff reductions on items like almonds, pistachios, oatmeal, and quinoa, it has made it clear that tariffs on meat, maize, wheat, and dairy products will not be reduced. Additionally, tariffs on automobiles, currently exceeding 100%, may be lowered gradually.

The government is particularly concerned that higher US tariffs could adversely impact key export sectors like pharmaceuticals, automobiles, and machinery.

IT.