India plans to further reduce import taxes as part of its strategy to counter potential reciprocal tariffs proposed by US President Donald Trump, according to finance officials. Finance Minister Nirmala Sitharaman, speaking at an event in Mumbai, emphasised that the duty cuts and rationalisation are part of a continuous process aimed at strengthening India’s position in global trade, said, “We are building to be an investor-friendly country, and as a result, the duty cuts and the rationalisation that have been announced is a continuing process and we shall keep doing that.”
The move comes as a response to US President Donald Trump’s proposed reciprocal tariffs on trading partners. India’s relatively high tariff rates and a $41 billion trade surplus with the US make it particularly vulnerable to such measures. Meanwhile, Finance Secretary Tuhin Kanta Pandey stated at the Mumbai event that tariffs on India’s 30 most important imports are under 3%, with higher duties applying to only a few select products. He added that these issues would likely be resolved during negotiations with the US.
Despite these risks, India remains committed to tariff rationalisation and economic reforms. By continuing to lower import duties, the government aims to encourage investment, enhance competitiveness, and mitigate the impact of any potential trade disputes with the US. Prime Minister Narendra Modi is keen to avoid any further economic slowdown. To prevent a trade war, India has made rapid concessions to the White House on core trade issues.
Following a recent meeting between Trump and Modi in Washington, both sides agreed to finalise a trade deal by the fall of 2025. Additionally, they set a goal of doubling bilateral trade to $500 billion by 2030. An Indian official, speaking on background, stated that New Delhi will continue working on a trade agreement beneficial to both parties while monitoring any measures imposed by the US.
