India is exploring the possibility of reducing import duties on select US products that are not heavily imported, as part of ongoing negotiations for a proposed Bilateral Trade Agreement (BTA) with the United States, officials told The Economic Times.
The Indian government has initiated talks with stakeholders in sectors like automobiles and auto components, where American imports do not pose a significant threat to domestic manufacturers.
The commerce department is also consulting with various ministries to identify products eligible for duty concessions without adversely affecting local industries, particularly focusing on safeguarding the agricultural sector.
As part of its strategy, the government is evaluating the potential impact of reciprocal tariffs that the US may impose on its trading partners.
Officials aim to assess how these tariffs could affect India’s competitive edge in global markets. “We have begun talks with line ministries,” an official confirmed to The Economic Times.
Currently, India exports around USD 15 billion worth of auto components to the US tariff-free, while American auto parts entering India face duties ranging fr0m 5 per cent to 15 per cent. This disparity was highlighted during recent inter-ministerial discussions on the India-US trade pact.
Both countries have set an ambitious goal to more than double bilateral trade to USD 500 billion by 2030. The first phase of the BTA is expected to be finalised by autumn 2025.
India has already taken steps toward tariff reductions on US goods. In the Union Budget announced on February 1, tariffs on bourbon whisky were lowered fr0m 150 per cent to 100 per cent, alongside cuts on imports of fish hydrolysate for aquatic feed, scrap materials, satellite ground installations, ethernet switches, and motorcycles.
The government is also considering lowering duties on electric vehicles (EVs), though officials note that current trade in ready-to-drive EVs between India and the US is minimal.
“The US is a high-cost country, and no major American EV manufacturer operates in India. Lowering duties is unlikely to trigger a surge in imports,” an official added.
The proposed duty cuts aim to strengthen trade ties while ensuring minimal disruption to India’s domestic industries.
