India Proposes Major Tariff Reduction to Fast-Track Trade Deal with Trump: Report

 India has reportedly offered to slash its tariff gap with the United States by nearly two-thirds—from around 13% to below 4%—in a bid to secure a trade agreement with U.S. President Donald Trump, according to two sources familiar with the matter.

If accepted, the proposal would narrow the average tariff difference between the two nations by 9 percentage points. This change would apply across a broad range of goods and would mark one of the most significant moves by India to reduce trade barriers in its economy—the fifth-largest in the world.

The U.S. remains India’s largest trading partner, with bilateral trade reaching approximately $129 billion in 2024. However, the trade relationship is imbalanced, with India maintaining a $45.7 billion surplus.

The news follows Trump’s recent announcement of his administration’s first “breakthrough deal” with the United Kingdom. That deal reduces average British tariffs on U.S. goods while preserving a 10% base tariff on British exports to the U.S.—a move that may indicate Washington’s negotiating model for future trade agreements.

Last month, Trump declared a 90-day pause on proposed reciprocal tariffs, which included a steep 26% duty on Indian goods, to allow room for trade negotiations. During this period, a 10% base tariff remains in effect on imports from India and many other countries.

India’s proposal aims to win exemption from both current and future tariff hikes, as both sides push for a swift conclusion to the trade talks.