Amid ongoing trade negotiations, former U.S. President Donald Trump has claimed that India is willing to cut tariffs to almost zero on American goods. Trump made the statement during a meeting with executives in Doha, Qatar. However, India has refuted these claims, stating that negotiations are still underway and that any agreement must be mutually beneficial.
Trump stated, "It is very hard to sell in India, and they are offering us a deal where basically they are willing to literally charge us no tariffs,". He also expressed his dissatisfaction with Apple's plans to expand production in India.
India's External Affairs Minister S. Jaishankar responded to Trump's statement by saying that "nothing is decided till everything is". He added that any judgment on the matter would be premature until a mutually beneficial agreement is reached.
According to Reuters, India has offered to reduce duties to zero on 60% of US imports in the first phase of a deal, while also offering preferential access to nearly 90% of the merchandise India imports from the U.S. In exchange, India is seeking a full exemption from existing and future U.S. tariff hikes.
The U.S. is India's largest trading partner, with bilateral trade totaling $129 billion in 2024. India had a $45.7 billion trade surplus with the U.S. last year, mainly in pharmaceuticals, electrical machinery, and jewelry.
Trump has long complained about India's high tariffs, which he says hurt U.S. businesses. In the past, Trump has called India the "tariff king" and a "big abuser". In early April, the U.S. imposed sweeping tariffs on imports from 60 countries, including India, but suspended them for 90 days. This pause is set to expire in early July.
India's equity benchmarks jumped after Trump's comments, with the Nifty 50 and BSE Sensex reaching their highest levels in seven months.
India was one of the first countries to begin trade negotiations with the U.S. following Prime Minister Narendra Modi's visit to the White House in February. Both sides have agreed to finalize a bilateral deal this year.
The U.S. average applied Most Favored Nation (MFN) tariff on agricultural goods is 5%, while India's average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while the U.S. only charges a 2.4% tariff on Indian motorcycles.
The ongoing trade negotiations aim to address these imbalances and create a fairer trading relationship between the two countries.
