India reportedly offers to cut tariffs gap by two-thirds to seal trade deal with the US

It is being reported that India is offering to slash its tariffs gap with the US to below 4% (currently 13%) in exchange for an exemption to Trump’s tariffs. To achieve that, India is said to be offering to reduce duties to zero on 60% of tariff lines in the first phase of the deal. This will help to reduce the average tariff differential between the two countries by about 9% in favour of the US.

For some context, India was slapped with an initial 26% tariffs before the 90-day pause as they run a large trade surplus of $45.7 billion with the US.

One of the sources also add that India has offered preferential access to almost 90% of goods imported from the US, including the reduced tariffs. And considering where they are in talks, India and Japan are the next two countries in line to finalise a deal. The source says that “we will see which one crosses the line first”.

I’m not sure being able to brag about getting a deal that quickly is all that is cracked up to be in this circumstance. It’s more important to be getting the right deal. And what this says essentially is that India is asking for a full tariffs exemption while offering a host of concessions.

We’ll see how that works since Trump and Lutnick have both said that 10% tariffs are “the best” one can get. It’s amazing how at the end of this all, Trump has hoodwinked the world into accepting 10% blanket tariffs across the board as being a good thing. Talk about Stockholm syndrome.

This article was written by Justin Low at www.forexlive.com.