New Delhi: India is considering a reduction or complete elimination of customs duties on American automobile parts in response to the tariffs announced by US President Donald Trump, according to reports.
Recently, Trump announced a 25 per cent tariff on all automobiles, set to take effect on 2 April. This date also marks the expected rollout of his broader reciprocal tariff measures.
The US President has frequently criticized India over tariffs and his sector-specific policies, coupled with upcoming reciprocal tariffs, may pose challenges for Indian trade.
To soften the impact of these measures, India is reportedly exploring reductions or the removal of import duties on American auto parts, which currently range between 10 to 15 per cent.
The move aligns with a broader trade strategy where India looks at lowering tariffs on items it exports to the US in large quantities but imports at a lower scale. India exports approximately $7 billion worth of auto components to the US while importing just around $1.5 billion worth of such parts.
As reported, discussions between Indian and US officials have so far been limited to auto parts and have not extended to automobiles. Both nations are engaged in negotiations to formulate a bilateral trade agreement that could serve as a middle ground amid escalating trade tensions.
India has conveyed to the US that outstanding trade issues should be resolved through ongoing trade talks rather than tariff impositions.
Reports suggest that India has argued against being subjected to the reciprocal tariffs set to come into effect on 2 April, emphasizing that a negotiated trade deal is a more effective resolution mechanism.
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