Discussions between India and the United States on a potential trade deal have only recently begun, making it premature to address specifics like tariff reductions, according to Indian government sources quoted by news agency PTI on March 8. This clarification came after US President Donald Trump claimed that India had agreed to substantially reduce tariffs on American goods.
According to sources cited by PTI, both nations naturally have their own “interests and sensitivities,” which are legitimate topics for discussion.
Notably, following discussions between Prime Minister Narendra Modi and President Trump in Washington DC last month, India and the US agreed to commence negotiations on a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA). The aim is to finalize the first phase of the agreement by autumn 2025. To advance these discussions, Commerce Minister Piyush Goyal visited the US from March 3 to 6, meeting with his American counterpart and the US Trade Representative.
India viewed President Trump’s statement on Friday, claiming that it had agreed to significantly reduce tariffs, as an exaggeration. During a White House briefing, Trump commented, “India imposes massive tariffs on us; you can’t even sell anything there, it’s almost restrictive… However, they have now agreed to drastically cut their tariffs because someone is finally holding them accountable.”
When questioned about Trump’s remarks during a media briefing on Saturday, Foreign Secretary Vikram Misri declined to elaborate. “I will not delve into that at this stage, as these discussions are ongoing, and it would not be appropriate to comment further,” he said.
Foreign Secretary Vikram Misri pointed out that tariff liberalization has been a key feature of several bilateral trade agreements India has signed in recent years. “Discussions on these issues are ongoing with various partners, and the current talks should also be viewed in that context,” he added.
As part of his “America First” policy, President Trump announced this week that starting April 2, the US would impose reciprocal tariffs on countries that maintain higher tariffs on American imports. This move has sparked fears of a potential global trade war, with several nations already introducing countermeasures in response.
Indian government sources noted that discussions on tariffs and other trade-related matters, which were a significant focus during Prime Minister Modi’s visit to Washington DC, remain part of an ongoing dialogue. While specifics are under negotiation, the sources emphasized that it is too early to comment on the details. They reiterated that each aspect of the talks is being addressed within a broader framework that considers the interests of both countries.
The sources also referred to earlier discussions between India and the US about a limited trade deal during Trump’s first term, which ultimately failed to materialize. In recent years, India has notably reduced its average applied tariffs for key developed nations, including Australia, the UAE, Switzerland, and Norway, through recently concluded bilateral trade agreements. Ongoing negotiations with the European Union and the UK are following a similar approach and should serve as a reference point for the current talks with the US.
Although India has not directly addressed Trump’s announcement of reciprocal tariffs, it has reaffirmed its commitment to strengthening trade ties with the US. This includes efforts to reduce tariff and non-tariff barriers as part of the proposed bilateral trade agreement (BTA).
External Affairs Ministry spokesperson Randhir Jaiswal stated, “Our goal with the BTA is to enhance and expand India-US trade in goods and services, improve market access, lower tariff and non-tariff barriers, and deepen supply chain integration between the two nations.”
Since taking office on January 20, Trump has consistently criticized India for its high tariffs, referring to the country as a “tariff king” and a “tariff abuser.” In its Union Budget for 2025-26, India announced plans to reduce tariffs on Bourbon whiskey, wines, and the Electric Vehicle (EV) sector, signaling its willingness to lower tariffs in specific areas to the Trump administration.
Washington has also urged New Delhi to increase imports of American oil, gas, and military equipment as a step toward reducing the trade deficit, which currently stands at approximately USD 45 billion in India’s favor, according to PTI. The US remains India’s largest trading partner, with bilateral trade in goods and services reaching USD 190 billion in 2023. Additionally, during the 2023-24 financial year, the US ranked as the third-largest source of foreign direct investment (FDI) in India, contributing USD 4.99 billion—representing a significant share of total FDI equity inflows.
