File photo of Indian Prime Minister Narendra Modi meeting US President Donald Trump at Hyderabad House in New Delhi on Feb 25, 2020. - Reuters
NEW DELHI: Indian Prime Minister Narendra Modi is preparing additional tariff cuts ahead of his meeting with US President Donald Trump that could boost American exports to India and avoid a potential trade war, government officials said.
Modi's trip to the US on Wednesday and Thursday (Feb 12-13) comes as Trump plans to announce reciprocal tariffs on many countries, a move aimed at reshaping global trade relationships in favour of the United States.
Trump has not specified which countries would be hit but has previously called India a "very big abuser" on trade and stressed that India should buy more American-made security equipment to move toward a fair bilateral trading relationship.
India is considering tariff reductions in at least a dozen sectors, including electronic, medical and surgical equipment, along with some chemicals, to raise US exports. These reductions align with New Delhi's domestic production plans, three government officials said.
The officials, who spoke on condition of anonymity, said that concessions are being considered for items that India primarily sources from the US or has potential to buy more of, such as dish antennas and wood pulp. Modi is expected to discuss tariffs with Trump next week and India is open to discussing a possible mini trade deal.
The early visit hopes to avoid a "trade war-like situation that is happening between US and China," a third official said. Trump imposed sweeping 10% tariffs on Chinese imports, prompting Beijing to respond with duties on American energy.
The officials did not wish to be identified as they are not authorised to speak to media. India's trade ministry, foreign affairs ministry and the Prime Minister's Office did not respond to requests for comment e-mailed outside official work days.
The discussions on tariff concessions follow a reduction in India's average import tariff rates to 11% from 13% on several items in the country's annual budget, and a cut in taxes on high-end bikes and luxury cars.
India is also reviewing surcharges levied on more than 30 items, including luxury cars and solar cells.
The upcoming meeting between Modi and Trump will focus on trade, defence cooperation and technology, but has been overshadowed by the recent deportation of Indians from the US.
One of the three officials said the meeting will help offer political direction to ties between the two countries and detailed talks on tariffs will follow the trip.
Despite Trump's criticism of India's trade practices, the US president has called Modi "fantastic".
The US is India's largest trading partner and two-way trade surpassed US$118 billion in 2023/24, with India posting a surplus of $32 billion.
Trade ties between the two nations have grown steadily over the last decade, with Washington increasingly viewing New Delhi as a counterbalance to China's growing regional influence. - Reuters
