How India’s Duty Cuts and Strategic Measures Aim to Alleviate U.S. Challenges Amid Trump’s Tariff Strategy

India is lowering import duties on several products, which could benefit US exports. The reduction includes fish hydrolysate, various types of waste and scrap, ground installations for satellites, ethernet switches, and motorcycles.

The duty on ethernet switches will drop from 20% to 10%. In the past financial year, the US exported around $653.4 million in ethernet switches to India. Additionally, the duty on synthetic flavoring essences is being cut from 100% to 20%.

Recently, US President Donald Trump labeled India as a “tariff king,” but these duty cuts may indicate a change that could encourage US exports in various sectors. According to officials, these reductions will affect imports from all countries equally.

Premium motorcycles from brands like Harley-Davidson, Triumph, and Suzuki will also see a price drop, as basic customs duties on these vehicles are reduced by 5-20%. This change responds to a long-standing request from the US.

Experts note that these tariff cuts show India’s willingness to improve trade relations. Ajay Srivastava, a trade expert, remarked that the reductions aim to ease trade tensions, especially regarding technology, automobiles, and industrial inputs.

Among other changes, India has also cut the duty on fish hydrolysate for aquatic feed from 15% to 5%, targeting an increase in American exports. Furthermore, the Indian government is allowing 100% foreign direct investment (FDI) in insurance and launching a five-year Mission for Cotton Productivity to focus on extra-long staple cotton. This decision aligns with the interests of the US, one of India’s key suppliers of cotton.

Additionally, India plans to amend the Civil Liability for Nuclear Damage Act of 2010, which has been a barrier for American companies wanting to invest in nuclear energy in India.

However, experts advise caution about pursuing a limited trade deal. The World Trade Organization has regulations that require substantial trade coverage in agreements with developed countries. Therefore, India must consider the implications of a small trade deal, as it is usually expected to cover over 90% of items.

Overall, these changes point to a strategic shift in India’s trade policies, signaling a desire to strengthen ties with the US while navigating a complex global trade environment.