India is in a hurry to protect President Trump's mutual tax, allowing it to cut tariffs on US imports worth $23 billion, according to the report.
South Asian nations are feeling heated as the White House prepares to launch hard mutual tariffs on April 2nd.
New Delhi estimated that such tariffs would reach 87% of total exports to the US worth a whopping $66 billion, two government sources familiar with the issue told Reuters.
India's proposal to cut tariffs on more than half of US imports is subject to ensuring relief from mutual taxes, according to the report.
Representatives from the White House and the Indian government did not immediately respond to a post office request for comment.
Trump warns that so-called “trade abusers” countries, particularly those “trade abusers” named India, will have no relief from mutual tariffs.
According to World Trade Organization data, the US trade weighted average tariffs were around 2.2% in 2023. The US has a $45.6 billion trade deficit with India.
China's average tariffs are 3%, while Japan's 1.7%.
However, New Delhi was keen to close the deal ahead of the April deadline.
The report states that Brendan Lynch, US trade aide for South and Central Asia, will lead a delegation of US staff to negotiate trade starting Tuesday.
The two countries first agreed to begin working towards an early trade agreement when Prime Minister Narendra Modi visited the US in February.
As part of the proposed transaction, India is shown to be open to lowering the 55% tariff on US imports, which are currently subject to 5% to 30% tax.
The decision to cut tariffs remains liquid, with other options on the negotiation table, including changes in taxes per product or departmental taxes.
India is also weighing broader reforms on its tariffs, but these discussions are in the early stages and may not belong to a US lecture, sources told Reuters.
New Delhi estimated that Trump's mutual tariffs would raise taxes of 6% to 10% on items such as pearls, mineral fuels, machinery, boilers and electrical equipment.
Trump's tariffs on the drug and automotive industry could also be acutely blowing India, as it relies on the US market, one source said.
Alternative suppliers like Indonesia, Israel and Vietnam can benefit from a large mutual tax on India, they added.
India aims to reach a deal with the US, but it makes clear that lower tariffs on certain goods such as meat, corn, wheat and dairy products are a problem.
South Asian countries also plan to promote gradual reductions in automobile tariffs. Auto tariffs have reached 110%, with Trump's ally Elon Musk criticising him as one of the steepest people in the world.
India's Secretary of Commerce Sunil Bhaswal told Congressional Committee earlier this month that India does not want to lose the US as its trading partner, but a source attending the closed doors council meeting said, “I don't want to compromise on national interests.”
But Commerce Secretary Howard Lutnick urged India to “think big” after cutting tariffs on motorcycles and bourbon whiskey this year.
With post wire
