NEW DELHI: India is planning to reduce tariffs on over half of its imports from the United States in response to President Donald Trump's threat to impose reciprocal tariffs on Indian goods. The decision to cut down on the tariffs of American goods worth 2,300 crore dollars has been taken by India after Donald Trump has threatened to impose the reciprocal tariffs from April 2 onwards. This move is part of ongoing trade negotiations and could pave the way for a broader trade agreement.

India currently imposes tariffs ranging from 5% to 30% on U.S. products, but the government is considering lowering or eliminating tariffs on 55% of these goods.

The U.S. has expressed concerns over India's average tariff rate of 12%, which is significantly higher than the U.S. average of 2.2%. The trade deficit between the two nations stands at 4,560 crore dollars, with India exporting 6,600 crore dollars worth of goods to the U.S. annually. However, Trump's retaliatory tariffs could impact 85% of these exports, particularly in sectors like pharmaceuticals, automobiles, diamonds, and machinery.

The tariff disparity is evident across various sectors. For example, agricultural products face an average U.S. tariff of 5.29% compared to India's 37.66%. Similarly, automobiles are taxed at 1.05% in the U.S. but 24.14% in India. Diamonds and gold face a 2.12% tariff in the U.S., while India imposes 15.45%. Chemicals and pharmaceuticals are taxed at 1.06% in the U.S. and 9.68% in India.