India considers duty cuts on select US imports under proposed trade deal: Report

If duties are lowered, it may not lead to a flood of imported products

India is considering lowering import duties on select products that it does not import in significant volumes from the US as part of the proposed Bilateral Trade Agreement (BTA), officials told the Economic Times.

Discussions have begun with stakeholders in sectors such as automobiles and auto components, where American imports pose no major threat to domestic manufacturers, the Economic Times reported. The commerce department has also initiated talks with line ministries to identify products where duty concessions could be offered without harming local industry, with a particular focus on shielding the farm sector, the report added.

Additionally, the government is assessing the potential impact of reciprocal tariffs proposed by the US administration on its trading partners. The idea is to analyze India’s export competitors to evaluate any relative price advantage and strategize accordingly. “We have begun talks with line ministries,” an official told the Economic Times.

India currently exports auto components worth approximately $15 billion (`1.2 lakh crore) to the US at zero duty, while imports of auto parts into India are subject to tariffs ranging from 5% to 15%. This tariff disparity was flagged during an inter-ministerial meeting on the India-US BTA, the report stated.

Both nations aim to more than double bilateral trade to $500 billion by 2030 and finalize the first phase of a multi-sector BTA by autumn 2025.

India has already announced duty reductions on certain US exports. In the Union Budget on February 1, New Delhi lowered tariffs on bourbon whisky from 150% to 100% and announced cuts on imports of fish hydrolysate for aquatic feed, scrap materials, satellite ground installations, ethernet switches, and motorcycles. These measures are expected to benefit American exporters, the Economic Times noted.

The report also highlighted that there is minimal trade of ready-to-drive electric vehicles (EVs) between India and the US, meaning a duty relaxation in this segment may not significantly impact domestic players. "The US is a high-cost country, and there is no major American EV manufacturer operating in India. If duties are lowered, it may not lead to a flood of imported products," an official told the Economic Times.