India is reportedly considering lowering tariffs on more than 30 products and increasing its imports of US defence and energy goods, in an effort to prevent higher reciprocal duties from Washington, The Economic Times reported, citing a Nomura report.

       The report indicates that India has been working to avert trade disputes with the US. In its latest Union Budget, the government reduced import duties on several items, including electronics, textiles, and premium motorcycles.

       To further strengthen diplomatic ties, India has also agreed to repatriate over 100 illegal Indian immigrants. Now, the country is exploring additional tariff reductions on luxury cars, solar cells, and chemicals to ensure smooth trade relations, the report stated.

       The report warns that if India does not lower tariffs on American goods, the US may respond with similar measures against Indian exports.

       For instance, if India imposes a 25 per cent tariff on US automobiles, Washington could implement an equivalent duty on Indian vehicles. US President Donald Trump, who has previously criticised India's trade policies, has pushed for “reciprocal tariffs” to ensure American exports receive fair treatment.

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       Nomura's analysis points out that India's tariff rates are relatively high compared to other nations, making it susceptible to US retaliatory actions. The US remains India's largest export market, accounting for around 18 per cent of total exports, which contributed approximately 2.2 per cent to India's GDP in FY24, the news report mentioned.

       India's trade surplus with the US has been increasing, reaching nearly $38 billion in 2024. Major Indian exports to the US include industrial machinery, gems and jewellery, pharmaceuticals, fuels, iron and steel, textiles, vehicles, and chemicals.

       Trump has previously referred to India as the “tariff king” and has urged the country to increase purchases of American-made security equipment. In recent talks with Prime Minister Narendra Modi, he has emphasised the need for a balanced bilateral trade relationship.

       To avoid higher reciprocal tariffs, the report suggests that India is exploring potential trade agreements with the US. In the medium term, India also aims to deepen economic ties with Washington and attract American supply chains to set up operations in the country.

       PM Modi's visit to the US

       Prime Minister Narendra Modi is set to visit the United States on Wednesday, where discussions related to tariff cuts, and energy and defence imports are expected to be on the agenda.

       Prime Minister Narendra Modi's upcoming meeting with President Trump in Washington on Friday is expected to address key issues related to tariffs and trade.

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