US May Exempt India from Proposed Tariffs, Separate from China and Canada
India could be spared from the suggested US reciprocal tariffs and would not be bracketed with China, Mexico, and Canada, government sources said. Trade talks between the two countries continue to be on a positive note, with no indication of a stalemate before the April 2 deadline for implementing the tariffs.
Authorities are said to be considering a 'sector-wise, tailored' plan that might involve a phased roll-out of new trade restrictions. In this scenario, high-demand items with large volumes of trade would likely experience only a modest tariff boost, lessening the blow to Indian exports. Concurrently, India is bargained for reduced tariffs on some of the most important sectors that send large quantities to the US.
Negotiators are in the process of completing the outlines of a fresh trade agreement in the next three days, sources confirmed. While the talks have been seamless, US officials are reported to be seeking further concessions from India. The US has been contemplating its tariff policies in light of changing global trade conditions, and India's potential exclusion from the same treatment as China, Mexico, and Canada reflects Washington's acknowledgment of India's unique trade relationship.
A possible waiver would give respite to Indian exporters who worry about sharp tariff increases. The Indian government has been in intense negotiations to ward off the effects, with it reportedly willing to reduce tariffs on more than half of US imports worth $23 billion. This is intended to protect Indian enterprises from retaliatory tariffs, which could have a drastic impact on exports.
A government study found that the new US tariffs would affect 87% of Indian exports to the US, worth about $66 billion. To balance this, India is mulling cutting tariffs on 55% of US imports that are taxed between 5% and 30%. Some tariffs might be drastically cut, while others may be eliminated. But all these proposals are in the negotiation phase.
The negotiations have gained momentum with a US team, headed by Brendan Lynch, Assistant US Trade Representative for South and Central Asia, visiting India at the moment. The talks that have commenced on Tuesday will work on clinching the agreement prior to the imposition of US tariffs next week.
With the approaching deadline, the two sides persist in negotiating vital conditions to conclude a mutually desirable pact that secures trade interests alongside closer bilateral economic relations.
