India eyes tariff cut on 55pc US imports to shield its exports

NEW DELHI, Mar 26 (Reuters): India is open to cutting tariffs on more than half of US imports worth $23 billion in the first phase of a trade deal the two nations are negotiating, two government sources said, the biggest cut in years, aimed at fending off reciprocal tariffs.

The South Asian nation wants to mitigate the impact of US President Donald Trump's reciprocal worldwide tariffs set to take effect from April 2, a threat that has disrupted markets and sent policymakers scrambling, even among Western allies.

In an internal analysis, New Delhi estimated such reciprocal tariffs would hit 87% of its total exports to the United States worth $66 billion, two government sources with knowledge of the matter told Reuters.

Under the deal, India is open to reducing tariffs on 55% of US goods it imports that are now subject to tariffs ranging from 5% to 30%, said both sources, who sought anonymity as they were not authorised to speak to the media.

In this category of goods, India is ready to "substantially" lower tariffs or even scrap some entirely, on imported goods worth more than $23 billion from the United States, one of the sources said.

India's trade ministry, the prime minister's office and a government spokesperson did not reply to mail seeking comments.

Overall the US trade-weighted average tariff has been about 2.2%, data from the World Trade Organization shows, compared with India's 12%. The United States has a trade deficit of $45.6 billion with India.