Amid changing global dynamics, India is moving towards preferential or free trade agreements (FTAs) wherein customs tariffs and non-tariff barriers are reduced or eliminated between the signatories, minister of state for commerce and industry Jitin Prasada told the Lok Sabha on March 11.
Prasada’s written reply comes at a time when the United States has threatened to impose reciprocal tariffs on India and other countries that have higher tax on American goods from April 2.
"Recent reforms have focused on streamlining the tariff structure and facilitating trade. India is a member of the WTO and bound to its maximum tariff that can be applied to a given commodity line. The applied tariffs are generally below the bound tariff for a given commodity line," the minister said.
India has 13 FTAs, nine preferential trade agreements and is in talks for a similar arrangement with the United Kingdom, the European Union and Oman.
India is also negotiating a bilateral trade agreement (BTA) with US, a decision taken during Prime Minister Narendra Modi’s visit to America on February 13.
Both sides aim to negotiate the first tranche of a mutually beneficial, multi-sector BTA by fall. The two countries have also set a new goal, “Mission 500”, aiming to more than double their bilateral trade to $500 billion by 2030.
India's tariff policy aims to regulate trade, protect domestic industries, and generate revenue through taxes on imported and exported goods, Prasada said.
The United States' reciprocal tariff plan to “correct longstanding imbalances in international trade" are expected to hit Indian chemicals, transportation (automobiles), textiles and footwear sectors among others.
In the Budget for FY26, India has announced significant tariff reductions on multiple products, many of which will benefit American exports. Among these are lower duties on fish hydrolysate, synthetic flavouring essences, ground installation for satellites, including spares and consumables and on motorcycles based on engine capacity.
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