India to make substantial tariff cuts for American products: Trump

India will soon make substantial cuts in tariffs for American products, US President Donald Trump said ahead of his April 2 reciprocal tariff announcement.

“I heard just a while ago that India is going to be dropping its tariffs substantially. And I said why didn’t somebody do this a long time ago. A lot of countries will be dropping their tariffs,” Trump said in a media briefing on Monday from his Oval office.

Top officials from India and the US had four days of talks on trade and tariff issues last week in New Delhi to lay the contours for a bilateral trade agreement (BTA). But neither of the two sides shared details of the tariff cut commitments made by India.

Sources said the US made demands of steep tariff cuts for many products such as automobiles, motorbikes, a range of agricultural items, alcohol and pharmaceutical and medical items. But there is no clarity on whether the US would wait for India to deliver on some of these demands by deferring the reciprocal tariffs

“Trump, in his recent statements, has not given any indication of any softening of his stance. One would not know before April 2 what his ultimate plans are but if India has actually committed to lowering tariffs on many products, then there could be a relaxed verdict,” a source tracking the matter told businessline.

Farm tariffs

Earlier on Monday, India’s agricultural tariffs were targeted by White House Press Secretary Karoline Leavitt in a media briefing. “If you look at the unfair trade practices – we have 50 per cent (tariff) from the European Union on American dairy and a 700 per cent tariff from Japan on American rice. You have a 100 per cent tariff from India on American agricultural products and nearly 300 per cent from Canada on American butter and cheese,” she said.

India’s average applied tariffs on agriculture products are actually about 39 per cent, and not 100 per cent as pointed out by Leavitt. But they are much higher than the US’s 5 per cent,

While agriculture is a politically and economically sensitive area for India, US Commerce Secretary Howard Lutnick maintained that sensitivities could be taken care of through mechanisms such as tariff rate quota.

In their meeting in Washington DC on February 14, Trump and Prime Minister Narendra Modi agreed to try and conclude the first tranche of the BTA by the Fall of 2025.

Non-tariff barriers

Apart from steep tariff cuts for many products, the US wants a range of non-tariff barriers, too, to be addressed in the negotiations. India, too, had made a list of non-tariff issues, such as issuance of more work visas and finalisation of a social security agreement, that it wants the US side to consider seriously.

The US is India’s topmost trade and export partner. The US has a trade deficit of about $35 billion with India which is much lower than it has with some other countries such as China, Mexico, Canada, Vietnam, Germany and Japan..