India Plans Tariff Reductions Ahead of Trade Talks with the U.S.

Investing.com -- According to government and industry sources in New Delhi, India is preparing to reduce tariffs on a range of products primarily imported from the U.S. ahead of upcoming trade talks with the United States. This move aims to facilitate a broader trade and investment agreement following the inauguration of President-elect Donald Trump.

In response to Trump's potential "reciprocal tariffs" on Indian products due to high tariffs, Indian trade ministry officials are considering tariff reductions on specific items such as pork. Currently, India imposes an import tariff of approximately 45% on pork, which is primarily sourced from the U.S.

Officials are also contemplating tariff reductions on high-tech medical devices, such as pacemakers, and luxury motorcycles, including Harley Davidson. According to a source with direct knowledge of trade matters, current tariffs on these products range from 25% to 60%.

In the fiscal year 2023/24, which ended in March, bilateral trade between India and the U.S. surpassed $118 billion. With a trade surplus of $32 billion, India aims to prepare for trade discussions with the U.S. to secure a broader trade and investment agreement following the inauguration of President-elect Donald Trump.

According to a second official, Indian officials proposed increasing imports of LNG and defense equipment from the U.S. to address Trump's concerns about trade imbalances.

A third government source indicated that India's energy imports from the U.S., covering crude oil, refined fuels, and coal, are estimated to be around $12 billion in the fiscal year 2024, while aircraft and parts are estimated at $2 billion. It was noted that these imports could rise by $5 billion to $10 billion annually.

Sources requested anonymity due to the confidential nature of the discussions. The trade ministry spokesperson declined to comment on the matter.