India Trims Industrial Tariffs to 10.66% Amid Trade Concerns with U.S.

India has slashed its average industrial tariff to 10.66% amid threat of reciprocal tariffs and ongoing trade negotiations with the U.S., the commerce ministry told Lok Sabha on March 25. “As per WTO 2023, India’s simple average tariff rate is 17%. Industrial goods tariff was at 13.5% in 2023... Post Union Budget 2025-26, the simple average industrial tariff has been reduced to 10.66,” Jitin Prasada, Minister of State for Commerce and Industry, told the House in response to an unstarred question.

He added, “Both countries would focus on increasing market access, reducing tariff and non-tariff barriers, enhancing supply chain integration and resolving bilateral trade issues.”

The development comes as India is set for one of the largest tariff cuts in recent years, while potentially scrapping some tariffs entirely. This is aimed at addressing US President Donald Trump's reciprocal tariffs that can dampen Indian exports. Currently, India is planning to trim tariffs on over half of US imports worth $23 billion in the initial phase of trade discussions, Reuters reported.

The report said that the centre is aiming to lessen the impact of the trade tariffs as it can affect 87% of India's exports to the US, worth over $66 billion.

Trump's reciprocal tariffs are set to be implemented from April 2.

While discussing with the U.S., New Delhi has expressed its willingness to lower tariffs on 55% of the US imports, on which the tariffs range from 5% to 30%.

Notably, the U.S. has a trade deficit of $45.6 billion with India, while its trade-weighted average tariff stands at about 2.2%, compared to India's 12%. Recent talks with PM Narendra Modi’s visit to the US aims to address these disparities.

As per reports, Washington is set to keep a softer approach as industries like automobiles, pharmaceuticals, and semiconductors are unlikely to face immediate levies. India has not given the go-ahead for potential tariff reductions as officials indicate that options like sectoral adjustments and product-by-product negotiations could be taken into consideration instead of widespread cuts.

India Trims Industrial Tariffs to 10.66% Amid Trade Concerns with U.S.