India Offers Major Tariff Cut to Seal Trade Deal with Trump: Report

 India has proposed cutting its tariff gap with the United States by nearly two-thirds — reducing it from around 13% to under 4% — in an effort to secure an exemption from President Donald Trump’s current and potential tariff hikes, according to two sources familiar with the matter. Both countries are pushing hard to finalize a trade agreement.

If accepted, this move would lower the average tariff differential between India and the U.S. by 9 percentage points. This figure is calculated across all goods, without adjusting for trade volume, marking one of the most significant efforts to reduce trade barriers in India, the world’s fifth-largest economy.

The U.S. is India’s largest trading partner, with bilateral trade reaching approximately $129 billion in 2024. Currently, India enjoys a trade surplus of $45.7 billion with the U.S., a key point of discussion in the negotiations.

On Thursday, Trump announced his administration’s first “breakthrough deal” with Britain, which reduces average British tariffs on U.S. goods but maintains Washington’s 10% base tariff on British imports — a likely model for ongoing talks with other partners, including India.

Just last month, Trump initiated a 90-day pause on the rollout of his long-planned reciprocal tariffs on global partners, including a steep 26% tariff on Indian goods. During this negotiation window, however, the U.S. continues to apply a 10% base tariff on imports from India and several other nations