India and the United States are reportedly in the advanced stages of negotiations over a trade agreement that could see tariffs on Indian exports slashed to between 15% and 16%, down from the current 50%, according to a Mint report citing government sources.
Chief Economic Adviser (CEA) V. Anantha Nageswaran had earlier expressed optimism that the long-standing tariff dispute between the two nations would be resolved within the next two months. He stated that the issue was likely to conclude with the withdrawal of the penal duties imposed by Washington. Speaking at an event organised by the Bharat Chamber of Commerce in Kolkata, Nageswaran said he was confident that “in the next couple of months, if not earlier,” the countries would “see a resolution at least to the extra penal tariff of 25%.”
The CEA further noted that discussions were underway to reduce the reciprocal tariff from 25% to a range of 10% to 15%, adding that such a development would be “an even bigger occasion to celebrate.”
The proposed agreement could be announced at the upcoming ASEAN Summit later this month, during a potential meeting between US President Donald Trump and Indian Prime Minister Narendra Modi, though both leaders are yet to confirm their attendance. Negotiations are being led by India’s Ministry of Commerce in coordination with the Ministry of External Affairs and the National Security Adviser’s office.
The United States remains India’s largest merchandise export destination, accounting for US $ 86.51 billion in shipments during FY ’25. Despite the impact of tariffs, Nageswaran observed that India had already achieved 50% of its targeted export volume to the US this year. However, he cautioned that maintaining current tariffs could result in a 30% decline in export volumes next year, given that exports constitute roughly one-fourth of India’s GDP.
