US May Push for Near-Zero Tariffs on Most Goods, but India Unlikely to Benefit: CNBC-TV18

The US administration has reportedly demanded zero tariffs on nearly all non-agricultural products traded with India, according to a CNBC-TV18 report on March 6. This move marks a significant challenge for India, as the US, under President Donald Trump’s leadership, is unlikely to offer any concessions on the reciprocal tariffs set to take effect from April 2.

Trump has repeatedly criticized India and other nations for what he perceives as "unfair" trade practices. During Prime Minister Narendra Modi’s recent visit to the White House, he specifically pointed out India’s high tariff rates, emphasizing that US companies face major hurdles in gaining market access due to these duties.

Meanwhile, Union Commerce Minister Piyush Goyal has engaged in discussions with the US Trade Representative and US Commerce Secretary to find common ground on trade concerns. Further negotiations are planned between officials from both nations in an attempt to reach a mutually beneficial outcome, the report stated. However, the US is unlikely to make any special exemptions for India, maintaining its tough stance on tariff reductions.

Key Sticking Points in the Trade Talks

One of the major points of contention in the trade negotiations is India's stance on auto imports. According to RedboxGlobal India, New Delhi is not immediately willing to eliminate tariffs on automobile imports but is open to making gradual reductions. The agency, citing sources, mentioned that government officials have consulted domestic car manufacturers regarding potential tariff reductions. However, Indian carmakers have expressed concerns over the impact of such changes on local industries, fearing that a sudden reduction to zero tariffs could harm domestic production and employment.

Besides automobiles, other sectors such as medical devices, electronics, and steel have also been areas of disagreement. The US has previously pushed India to lower import duties on high-end medical equipment like stents and knee implants, a demand that India has resisted due to concerns over affordability and accessibility for its citizens. Similarly, the Indian steel and aluminum industry has been affected by US tariffs, which India has long sought to negotiate. This comes at a time when the USDINR rates have been improving in favour of India, with the currency rate has come down to near ₹87 level as of writing. 

Implications for India-US Trade Relations

The ongoing trade talks come at a crucial time for India-US economic relations. Both countries have strong bilateral trade ties, with trade volumes exceeding $100 billion annually. However, disputes over tariffs and market access have frequently strained relations. The US had previously revoked India’s preferential trade status under the Generalized System of Preferences (GSP) in 2019, citing unfair trade practices. This move had a significant impact on Indian exporters, particularly in sectors such as textiles, jewelry, and engineering goods.

While India has taken steps to address some US concerns, such as easing restrictions on certain American agricultural products, it remains firm on protecting key domestic industries. Experts believe that finding a middle ground will be essential to maintaining stable trade relations.

As discussions continue, it remains to be seen whether India and the US can resolve these differences and pave the way for a more balanced trade agreement.