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India offers to narrow tariff gap with U.S. to under 4%

MacDailyNews

May 9

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Prime Minister Narendra Modi and US President Donald Trump at the "Howdy, Modi!" event in Houston. (Photo: Narendra Modi-Twitter) — Prime Minister Narendra Modi and US President Donald Trump at the Prime Minister Narendra Modi and US President Donald Trump at the “Howdy, Modi!” event in Houston in September 2019. (Photo: Narendra Modi-Twitter)

India is proposing reducing the tariff gap with the U.S. to below 4% and seeks exemption from all existing and future tariff increases. In return, India offers preferential access to 90% of U.S. goods and requests the U.S. to treat it as an ally on critical technology matters.

Shubham Batra, Shivangi Acharya and Ira Dugal for Reuters:
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India has offered to slash its tariff gap with the U.S. to less than 4% from nearly 13% now, in exchange for an exemption from President Donald Trump’s “current and potential” tariff hikes, two sources said, as both nations move fast to clinch a deal.
This would mean that the average tariff differential between India and the U.S., calculated across all products without weighting for trade volume, would be reduced by 9 percentage points, in one of the most sweeping changes to bring down trade barriers in the world’s fifth largest economy.
The United States is India’s largest trading partner, with bilateral trade totalling some $129 billion in 2024. The trade balance is currently in favour of India, which runs a $45.7 billion surplus with the U.S.
After the UK, India and Japan are the next two nations in line to finalise a deal, a third Indian government official said. “We will see which one crosses the line first.”
To achieve this, New Delhi has offered to reduce duties to zero on 60% of the tariff lines in the first phase of the deal which is under negotiation, said the first two sources, both Indian government officials familiar with the matter.
India has offered preferential access to nearly 90% of goods imported from the United States, including the reduced tariffs, one of the two officials said.

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MacDailyNews Take: Good news for Apple as the company continues to ramp up product assembly in India, away from Chinese Communist Party-controlled China.

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