India has proposed cutting its average tariff gap with the U.S. from nearly 13% to under 4% in hopes of securing exemptions from current and future U.S. tariff hikes, according to Indian government sources. The move aims to finalize a trade agreement with the Trump administration, following a similar deal recently signed with the UK.
The U.S. is India's top trading partner, with $129 billion in bilateral trade in 2024. India currently runs a $45.7 billion surplus. As part of the proposed deal, India has offered zero tariffs on 60% of product categories and preferential access on nearly 90% of U.S. goods.
In return, India seeks tariff exemptions and better market access for its key exports, including textiles, leather, chemicals, and agricultural products. It also wants to be treated on par with key U.S. allies in sectors like AI, biotech, and semiconductors.
To sweeten the deal, India is offering to ease export restrictions on high-value U.S. goods such as aircraft, electric vehicles, medical devices, and luxury products.
Negotiations are ongoing, and a delegation of Indian officials is expected to visit the U.S. soon.