PM Narendra Modi with US President Donald Trump (File Image)
Photo: PTI
New Delhi: In preparation for Prime Minister Narendra Modi‘s upcoming talks with US President Donald Trump during his visit to the US, India is reportedly considering further duty reductions to promote American exports, according to Reuters, which cited government sources. Additionally, New Delhi might reference recent tax reductions on American imports as a strategy to bypass tariffs.
PM Modi is scheduled to visit the United States on February 12-13 to meet with President Trump. Before this meeting, India is contemplating tariff adjustments, although there has been no official confirmation as of yet.
In the coming days, it is anticipated that India may implement custom duty reductions across a variety of sectors, including electronics, surgical and medical equipment, and certain chemicals, as reported by Reuters.
These adjustments are aimed at items for which India often relies on US imports and could feasibly acquire more from the United States, such as dish antennas and wood pulp.
Moreover, it has been suggested that India might leverage recent duty cuts to evade Trump tariffs, as indicated in a report by the Times of India. Trump’s economic adviser, Kevin Hassett, pointed out India’s high tariffs, which hinder imports, and noted that Prime Minister Modi had significant discussions planned with President Trump during their upcoming meeting.
India Reduces Custom Duty on American Goods
In the latest Union Budget, India announced reductions in customs duties for motorcycles, including those made by Harley Davidson, as well as on synthetic flavoring essences. This duty reduction is expected to favor American exporters directly.
The tariff on motorcycles with engine sizes below 1,600cc has been decreased from 50% to 40%, while for those exceeding 1,600cc, it has been lowered from 50% to 30%.
India has cut the duty on fish hydrolysate used for aquatic feed production from 15% to 5%, a change that significantly affects US exports, valued at $35 million in 2023-24.
Additionally, the customs duty on synthetic flavoring essences has been reduced from 100% to 20%, corresponding to US exports worth $21 million in FY24.
The Global Trade Research Initiative (GTRI) remarked that despite the Trump administration’s frequent criticisms labeling India as the biggest tariff offender, the recent Budget has introduced notable tariff cuts across various products that benefit US exports.
“With major tariff reductions on technology, vehicles, industrial inputs, and waste imports, India seems to be making efforts to facilitate trade even amidst a strained global trading environment. It remains to be seen if these reductions will influence Washington’s perspective on India’s trade policies or become a contentious issue in the US election cycle,” the GTRI noted.
