India reportedly plans fresh import duty cuts ahead of Trump’s ‘reciprocal tariffs’ announcement

Apart from tariff-related discussions, the proposed BTA negotiations also cover key issues like digital services and data localization.

India is considering another round of import duty reductions ahead of April 2, as US President Donald Trump prepares to unveil "reciprocal tariffs" targeting trade partners he claims have imposed unfair levies on American goods, Economic Times reported, citing sources familiar with the matter.

The government is in the process of identifying specific products predominantly manufactured in the US that could benefit from the proposed tariff cuts. Unlike concessions under a trade agreement, these reductions will be made on a Most Favoured Nation (MFN) basis, ensuring that the lowered duties apply uniformly to all MFN imports of the selected items, according to Economic Times.

The list under consideration reportedly includes four to five product categories, such as specialized electronics, chemicals, plastics, aircraft, parachutes, and cruise ships. India currently levies import duties of 7.5 percent to 10 percent on these goods.

New Delhi has already slashed tariffs on several US-made products, including bourbon whiskey, scrap, and motorcycles, in recent months.

"Multiple strategies are being examined," an official told Economic Times, emphasizing that any decision on further duty reductions will be made at the highest levels of government after assessing all possible scenarios and evaluating the progress of the proposed India-US Bilateral Trade Agreement (BTA).

According to World Trade Organization (WTO) rules, customs tariff changes must be applied on an MFN basis unless implemented under a bilateral or multilateral trade deal. India’s simple average industrial tariff has already been reduced to 10.66 percent from 13.5 percent in 2023 following the February 1 budget, according to government data cited by Economic Times.

Apart from tariff-related discussions, the proposed BTA negotiations also cover key issues like digital services and data localization. Additionally, India is weighing potential tariff concessions on select American agricultural products, which were discussed during official trade talks that began on Wednesday.

Meanwhile, domestic industry groups have urged the government to intervene and take measures to mitigate or delay Trump’s anticipated tariff action, Economic Times reported.