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India-US trade negotiations are progressing based on sector-wise strategy with phased tariffs, which minimises impact on Indian exports.

Unlike China and Mexico, India may escape steep US tariffs

| @indiablooms | Mar 27, 2025, at 03:50 pm

New Delhi: India is likely to receive relief from the proposed US tariffs and may not be grouped with China, Mexico, and Canada, India Today reported.

Trade negotiations between the two countries are progressing without any signs of an impasse ahead of the April 2 deadline for US reciprocal tariffs.

Officials are working on a "tailored, sector-wise" strategy, which could result in a phased implementation of new trade measures, according to the report.

As part of the agreement, high-demand goods with significant trade volumes may see only a moderate tariff hike, limiting the impact on Indian exports.

Additionally, Indian trade negotiators are advocating for reduced tariffs on key sectors that account for a substantial share of exports to the US.

Sources revealed that discussions are in the final stages, with negotiators aiming to conclude the framework of a new deal within the next three days.

However, US officials are reportedly pushing for further concessions from India.

The US has been reassessing its tariff policies amid shifting global trade dynamics.

India’s potential exclusion from the tariff measures imposed on China, Mexico, and Canada suggests Washington recognises its distinct trade relationship with New Delhi, offering relief to Indian exporters worried about tariff hikes.

A day earlier, reports indicated that India is open to reducing tariffs on over half of US imports worth $23 billion as part of the ongoing trade talks.

The move is intended to shield Indian businesses from the impact of reciprocal tariffs, which could otherwise hurt exports significantly.

Government sources cited in a Reuters report noted that an internal assessment showed the proposed US tariffs could affect 87% of Indian exports to the US, valued at approximately $66 billion.

To mitigate this, India is considering lowering tariffs on 55% of US imports currently taxed between 5% and 30%.

Some tariffs could be significantly reduced, while others might be eliminated entirely, though discussions on these proposals are still ongoing.

Meanwhile, a US delegation, led by Brendan Lynch, Assistant US Trade Representative for South and Central Asia, is in India for trade discussions that began on Tuesday.

The goal is to finalise the agreement before the US reciprocal tariffs take effect on April 2.

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