US to Ease Tariffs on India as Trade Deal Nears Completion: Trump

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 US President Donald Trump announced that Washington is “pretty close” to finalizing a “fair trade deal” with India, indicating that the United States will soon reduce the steep tariffs imposed on Indian goods. India currently faces some of the highest tariffs globally—around 50 percent—primarily due to an additional 25 percent “penalty” for its earlier purchases of Russian oil.

Trump, addressing reporters at a White House press briefing, explained that the high tariff rates were largely a result of India’s energy trade with Russia. “Right now, the tariffs are very high on India because of the Russian oil, and they have stopped doing the Russian oil. It’s being reduced very substantially. Yeah, we will bring the tariffs down at some point,” he said.

In New Delhi, government officials confirmed that they see no need for further negotiations on the trade deal, as the two sides have been working on the legal text since October. “Talks are progressing well between the two sides,” said one senior official, adding that India and the US are negotiating a comprehensive, WTO-compliant agreement. “We have taken into account all sensitive sectors. We don’t see the need for any more rounds of negotiations and are awaiting the US response to India’s trade proposal.”

India was one of the first nations to begin formal trade discussions with the US earlier this year, following Prime Minister Narendra Modi’s visit to Washington in February. Officials expressed optimism that, after months of back-and-forth talks, the two nations may soon sign the much-anticipated agreement.



Expanding Global Trade Partnerships

The official also revealed that India’s efforts to diversify exports are advancing on several fronts. Talks with New Zealand are nearing completion, and New Zealand’s Trade Minister Todd McClay is expected to visit India shortly. Meanwhile, the EU Trade Commissioner Maros Sefcovic will visit New Delhi in December for trade discussions.

Commerce and Industry Minister Piyush Goyal reiterated that India’s trade negotiations will not come at the cost of domestic interests. “India will not compromise the interests of our farmers, dairy producers, and workers in any trade deal,” he emphasized. Goyal added that the government is actively seeking new markets, including Russia, for the fisheries sector, which has been affected by steep US tariffs.

“We are working for a fair and balanced trade deal. India is not going to compromise the interests of farmers, dairy producers, and workers. We want an equitable and mutually beneficial agreement,” Goyal said during an industry event on Tuesday.

The Final Lap of Negotiations

According to trade ministry sources, India and the US are now finalizing the draft text of the trade agreement. Delhi believes that no further talks are necessary, as both sides have already aligned on key terms. Since nearly 25 percent of the tariffs imposed on India were linked to Russian oil imports, Indian officials are hopeful that the final tariffs will not exceed 15–20 percent once the agreement is in place.

“We want a fair, equitable, and balanced trade deal with the US,” said a senior official. “If that happens, it could be announced any day—it could happen tomorrow, next month, or even next year. But as a government, we are preparing for all scenarios.”

Experts say the proposed tariff reduction would bring India’s trade terms more in line with those of major partners like the UK and Japan. Currently, Indian goods face a significant competitive disadvantage against Chinese products, even with a 20 percent tariff gap between the two countries.

Trade analysts suggest that a 15 percent tariff rate would be ideal for India. The US currently applies 20 percent tariffs on Vietnam and around 19 percent on ASEAN nations like Malaysia and Cambodia. Aligning India’s rate within the 15–20 percent range would make Indian exports more competitive under the global “China Plus One” manufacturing strategy, which encourages companies to diversify supply chains beyond China.

Energy Imports and Strategic Cooperation

A tariff rate lower than Vietnam’s would be strategically significant for India. Vietnam’s rapid export growth means that, at its current pace, it could soon surpass India’s total goods exports despite its smaller size.

To strengthen its position, India is expected to increase energy imports from the US, which could help secure more favorable tariff terms. Negotiators are reportedly working toward a final rate between 15 and 20 percent. However, officials cautioned that ongoing legal proceedings in the US Supreme Court could influence the outcome if the Trump administration faces setbacks.

Commerce Minister Goyal also underscored the importance of energy cooperation between the two countries. Speaking in September, he noted that India is a large energy importer and that the country’s energy security strategy will continue to depend heavily on collaboration with the United States.

Goyal expressed India’s interest in advancing Small Modular Reactor (SMR) technologies from the US, highlighting that both nations are committed to deepening cooperation in the nuclear energy sector. “India’s energy future has a very high element of US involvement,” he said, emphasizing the long-term nature of the partnership.

Strategic Implications

The reduction in tariffs and the upcoming trade deal signify a pivotal shift in US-India economic relations. After easing tensions with China, Washington appears to be focusing more on strengthening ties with India, viewing it as a strategic counterbalance to Beijing’s growing influence in the Indo-Pacific region.

Trade experts argue that for India to remain competitive globally, securing tariff reductions comparable to other Asian economies is essential. Bringing rates down to around 15 percent could enhance India’s export potential and attract multinational companies seeking alternatives to China.

In conclusion, both Washington and New Delhi appear determined to finalize a fair, balanced, and mutually beneficial agreement. While the timing of the deal’s signing remains uncertain, the direction is clear—India and the United States are entering a new phase of economic partnership that could reshape trade dynamics across the region.


This article draws inspiration from an Indian Express 


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