India is trying to convince the US to reduce non tariff barriers faced by its exporters in the American market in multiple sectors — from chemicals and plastics to shrimps and fruits — even as it readies to commit to tariff cuts for a number of US imports ahead of the April 2 reciprocal tariffs threatened by Washington DC.
While top officials from both countries discussed tariff cuts and contours of a bilateral trade agreement in New Delhi this week, some line Ministries were simultaneously collecting more industry inputs on Non-tariff barriers (NTBs) to make India’s case stronger, a source told businessline.
Trade Barriers
“India faces lower tariffs in the US compared to what it imposes, and it would not be realistic to expect substantial tariff reduction for Indian exports, except for a handful of items like textiles. But exporters face a lot of NTBs, and that must be a key focus for gains in the potential bilateral trade agreement (BTA),” the source said.
NTBs are in various forms such as complicated registration processes, very low pesticide tolerance limits and stringent domestic standards and rules not based on proper scientific requirements. India also wants faster processing of work visas in the US and a totalisation pact to put a stop to social security deductions of short-term Indian workers in the US.
US President Donald Trump’s primary ask is creation of a level-playing field for US industry and the country has been demanding steep duty cuts from India in many sectors, particularly automobiles, agricultural items, including fruits nuts and dairy, and alcohol.
Washington DC also has a list of non-tariff related demands in areas such as digital trade (where it has issues with India’s laws on data localisation), IPR and government procurement (including local content requirement), the source added.
Negotiation Push
“In this week’s meeting concluding on Friday, the Indian team is likely to make some commitments and offers on the extent of tariff cuts it could bring about on certain items of US interest. More would be promised as the BTA negotiations progress. Whether India’s offers are enough to convince the Trump administration to hold back the April 2 tariffs is to be seen,” the source said.
There is likely to be a readout from the government on the spin-offs from the officials meeting on Saturday.
Trump has kept everyone guessing about his April 2 threat of reciprocal tariffs on high-tariffing countries like India.“If the US is not happy with what India is ready to offer to it right now, it could impose some reciprocal tariffs on the country on April 2. Alternatively, it could hold the tariffs by imposing some condition. Either way, April 2 is likely to be used as leverage by the Trump government to get a good deal with India in the near future,” the source said.
The US is India’s largest trading and export partner. In FY24, India exported goods worth $77.51 billion to the US and its imports were worth $42.19 billion.
Last month, Prime Minister Narendra Modi and Trump agreed to deliver the first tranche of a mutually beneficial BTA by Fall of 2025.
