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Zero-for-zero tariffs may be possible between the US and the EU, but not between India and the US, official sources told agencies.
A zero-for-zero tariff strategy, which means both sides cut all tariffs, is highly unlikely under the proposed bilateral trade agreement between India and the US, according to official sources, as the two nations are at different economic development levels.
The official doubled down that the India-US agreement would be more of a “package deal”. Trade agreements do not work in a way where if Trump slashes tariffs on electronics to zero, India would do the same, too, they said.
The latest statements to agencies came amid both countries negotiating a bilateral trade agreement (BTA) since March. The first phase of the BTA is expected to conclude by October this year, which aims to lift bilateral trade to $500 billion by 2030.
The BTA also looks to cut customs duties on a significant number of goods traded between India and the US, along with easing norms to promote further trade in services. For India, this means duty concessions on textiles, gems, leather, plastics, chemicals, and horticulture products. The US, on the other hand, will look at India cutting tariffs on EVs, industrial goods, liquor, and petrochemical products.
The US, India’s largest trading partner in fiscal 2022 and fiscal 2024, accounts for about 18 per cent of the country’s total goods exports. In fiscal 2024, India posted a $35.32 billion trade surplus in good with the US in bilateral trade.
India’s exports include drug formulations and biologicals (now at more than $8 billion annually), telecom instruments, precious and semi-precious stones, petroleum products, jewellery, garments and textiles (especially cotton).
India imports more than $4 billion of crude oil and $3.5 billion worth of petroleum products from the US.
On Sunday, the India Cellular and Electronics Association (ICEA) said that the export of smartphones (especially iPhones), tablets, and laptops from India to the US would be cheaper by 20 per cent compared to those shipped from China following the recent tariff changes. The Trump government on Saturday exempted smartphones, tablets, laptops, and some other electronic devices from new tariffs.
"China still has 20 per cent of iPhones, laptops, tablets, and watches,” ICEA Chairman Pankaj Mohindroo told agencies, “India has zero tariffs on iPhones and all smartphones, laptops and tablets exported to the US.”
Industry experts and market analysts are of the opinion that the recent tariff rejig is a great opportunity for India to plan for a long-term strategy for stability in business and investments between the country and the US.
