‘Zero-for-Zero’ Tariffs Unlikely Under India-US Bilateral Trade Deal
As both countries, India and USA are at different levels of economic development, the “zero-for-zero” tariff trade deal is not likely under the proposed India-US bilateral trade agreement. This arises after some trade experts earlier suggested that India will likely propose a 'zero-for-zero' tariff trade policy with the US in response to Donald Trump's ‘reciprocal tariff’ hike announced on April 2, 2025. According to reports, the agreement between India and the US will be a “package deal” which can include goods and non-tariff barriers.
Since March 2025, India and the US are observed to have been engaged in negotiating a trade deal. Reports highlighted that a zero-for-zero tariff trade deal between the US and the European Union (EU) can be possible as both partners are developed and advanced nations.
India and the US are said to to hold a sector-specific discussion in the upcoming weeks under the bilateral trade agreement. Here, two countries might significantly reduce or eliminate customs duties on the maximum number of goods traded between them, in turn increasing the bilateral trade and boosting investments into the nations.
India is believed to be looking out for tariff cuts in sectors like apparel, textiles, gems and jewelry, leather, plastics, chemicals, oil seeds, shrimp, and horticulture products, while the US will be looking for concessions in industrial goods, automobiles (EVs particularly), wines, petrochemical products, dairy, and agriculture items.
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According to the Ministry of Commerce & Industry data, India's goods exports were at $395.63 billion as of February 2025, against $395.38 billion as of February 2024. It also showed that India's services export till the month of February in the 2024-25 fiscal was at $354.90 billion, compared to a year ago of $311.05 billion.