India is steadfast in prioritizing national interests during ongoing trade and tariff discussions with the United States, even as Washington prepares to implement its revised tariff policy on April 2.
According to sources, India has agreed to lower tariffs on select items to safeguard its broader economic interests. However, a senior government official emphasized, “This does not imply India is yielding to US pressure.”
The Indian government is open to tariff reductions on specific agricultural products such as walnuts, apples, and almonds. However, it remains firm on protecting key crops like wheat and maize, where no tariff concessions are expected due to the sensitivity of the domestic agricultural sector.
A major concern, however, lies in the automobile industry. US President Donald Trump has announced a 25% tariff on imported vehicles, including sedans, SUVs, crossovers, minivans, cargo vans, and light trucks, along with essential auto components such as engines, transmissions, and electrical parts. The White House has also indicated the possibility of extending these tariffs to additional auto parts if required.
“This could significantly impact India’s auto sector, but we are prepared to reduce tariffs on motorcycles and smaller passenger vehicles,” sources revealed. The government has preemptively introduced incentives and benefits for the electric vehicle industry to counter potential adverse effects, leading to a boost in the sector. Additionally, recent GST rate cuts and reductions in customs duties are expected to cushion consumers from tariff impacts.
Furthermore, Tesla has been provided a level playing field in India, with the expectation that increased competition will drive domestic car manufacturers such as Tata and Mahindra to enhance their offerings.
The US tariff decision is likely to strain trade ties with key allies, including Japan, South Korea, Canada, Mexico, and Germany.
Meanwhile, American product enthusiasts have reason to rejoice, as India has agreed to lower tariffs on Bourbon whiskey, with the possibility of similar relaxations on other goods in the future.
Since reclaiming the White House in January, Trump has reinstated tariffs on imports from major US trading partners, including Canada, Mexico, and China, alongside a 25% duty on steel and aluminum imports.
Officials state that the focus remains on establishing clear terms of reference as both nations progress towards a Bilateral Trade Agreement (BTA) and set timelines accordingly. While the US has expressed its intent to engage positively with India, New Delhi has made it clear that these negotiations are exclusive to the US and India, with no parallel concessions expected for other nations.
