India’s Tariff Cuts Aligns With Past Trade Pacts, Not Trump Threats, Say Sources
With U.S. President Donald Trump’s April 2 deadline for reciprocal tariffs looming, Indian officials are pushing back against claims that recent tariff cuts stem from U.S. pressure. Highly-placed sources insist these reductions are part of India’s ongoing efforts to boost trade with developed nations through bilateral agreements, not a reaction to Trump’s threats.
India has a track record of trimming tariffs under deals with countries like Australia, the UAE, Switzerland, and Norway. Talks with the European Union and the UK are also in progress. “Our tariff cuts with the U.S. fit this pattern,” a source said, downplaying Trump’s influence. Last month, during PM Narendra Modi’s visit to Washington, India and the U.S. agreed to work on a Bilateral Trade Agreement (BTA) targeting $500 billion in trade by 2030. This includes lowering tariffs and easing market access.
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Commerce Minister Piyush Goyal led a delegation to the U.S. from March 3-6, meeting U.S. officials like Commerce Secretary Howard Lutnick. The talks focused on a multi-sector trade pact, building on discussions from Trump’s first term that never took off. Now, with Trump vowing to match India’s “100%+ tariffs” starting April 2, urgency has spiked. He told Congress, “Whatever they tax us, we’ll tax them,” calling current trade unfair.
The U.S. has pushed India to drop tariffs on most goods except agriculture—a demand India sees as one-sided. India’s average tariff is 17%, far above the U.S.’s 3.3%, per recent data, fueling Trump’s “tariff king” label. Yet, India’s exports to the U.S.—$87 billion in 2024—rely heavily on sectors like gems and pharmaceuticals, which could face a hit.
Policymakers and businesses are preparing. Reports suggest tariff cuts on U.S. imports like autos and chemicals are on the table, while Indian firms partner with American companies to soften the blow. Still, sources stress this aligns with India’s global trade goals—not just Trump’s deadline. As April 2 nears, the BTA talks could shape a smoother trade future—or test India’s resolve.
