US-India ‘fast-track’ talks on tariff cuts begin in Delhi

India and the US have decided to speed up trade and tariff cut talks ahead of US President Donald Trump’s April 2 reciprocal tariff threat through a fast-track mechanism aimed at delivering early results in areas of key market access interests. Top officials from both countries formally began the India-US fast-track mechanism meeting in Delhi on Wednesday,(26 Mar ’25) hoping to deliver some quick results this week.  “It was decided by both sides that a fast-track mechanism was needed for fast results on tariff cuts in some areas to convince Trump to hold back reciprocal tariffs against India on April 2,” a source told businessline.

The talks, led by Assistant USTR Brendan Lynch and Commerce Additional Secretary Rajesh Agarwal, would be focussed on fast-tracking of key outcomes.

Some sectors where the US has specifically sought substantial tariff cuts include cars, motorcycles, alcohol, including whisky, and a range of agricultural products.

“The Commerce Department has held extensive talks with other Ministries and the industry to draw up a list of items where tariff cuts for the US could be expedited. Also, there are items that are sensitive and cannot be touched. There is a list of items where India wants market access in the US,” the source said. Trump’s steel & aluminium tariffs take shine off engineering goods exports.Engineering goods exports in FY25 may be lower than targetted $118 billion due to slowdown in last two months of the fiscal, says EEPC.

Tariff cuts for the US may be brought about on many industrial goods ranging from chemicals and textiles to engineering products and motorcycles. On cars, India may reportedly agree on a phased tariff reduction plan. However, in agriculture, which is an economically and politically sensitive sector,  India would have to walk a tightrope. “India may agree on tariff cuts for certain items such as almonds, walnuts, pistachios, quinoa, apples and oatmeal as the US is insistent on farm product inclusion. But products like wheat, maize and dairy may be kept out,” the source said...Trump has dubbed April 2 as “liberation day” for the US when he would impose reciprocal tariffs on “high-tariffing” countries, including India, to match their tariffs. 

The US is India’s largest trading and export partner. In FY24, India exported goods worth $77.51 billion to the US and its imports were worth $42.19 billion. Last month, Prime Minister Narendra Modi and Trump agreed to deliver the first tranche of a mutually beneficial BTA by the fall of 2025. The BTA seeks to more than double bilateral trade to $500 billion annually.