India's Tariff Cut Offer To Seal Trade Pact With Donald Trump

India-U.S Trade Deal: India has reportedly offered to reduce the tariff gap with the U.S to less from close to 13 per cent in hopes of an exemption from U.S President Donald Trump's current and potential tariff hikes, as both countries fasten to seal a trade deal.

This would reduce the average tariff differential between India and the U.S., calculated across all products without weighing for trade volume, would go down by 9 percentage points.

The United States is India's largest trading partner, boasting a bilateral trade balance that favours India, running a surplus of USD 45.7 billion with the U.S.

On Thursday, Trump announced his administration's first 'breakthrough deal" with Britain. It would essentially reduce British tariffs on U.S goods but keep in place the 10 per cent base tariff in place by Washington on U.K goods. There is likely hood that this would stand true for other trading partners.

Is India Next To Finalise a Trade Pact With The U.S? 

Previous month, Trump announced a 90-day halt on his long-planned reciprocal tariffs on global trading partners, including a 26 per cent tariff on India, while his administration negotiates trade deals. A 10 per cent base tariff continues to apply to India and many other countries during the pause.

After the UK, India and Japan are the next two nations most likely to finalise a deal.

To make this a reality, New Delhi has offered to reduce duties to zero on 60 per cent of the tariff lines in the first phase of the deal which is under negotiation.

India has offered preferential access to nearly 90 per cent of goods imported from the United States, including the reduced tariffs, one of the two officials said.

A delegation of Indian officials are reportedly expected to visit the U.S. later this month to take the negotiations forward. Piyush Goyal might also visit, however his plans are not finalised yet.