The United States is now urging India to reduce its import tariffs and increase its procurement of American defense products in order to facilitate the signing of a comprehensive bilateral trade agreement. 

US Commerce Secretary Howard Lutnick, in an interview with an Indian media house, emphasised that India’s high import tariffs, which are among the steepest globally, require reconsideration in light of the two countries “special relationship.”

Speaking from Washington, Lutnick highlighted the need for India to reduce its dependency on Russian defense equipment and shift its purchases towards US defense products. 

This push from the US comes just weeks before President Donald Trump’s planned imposition of reciprocal tariffs on several trading partners, including India, from early April – a move that has raised concerns among exporters from various sectors such as electronics and automobiles.

Lutnick expressed the US preference for a direct and focused bilateral discussion with India aimed at reducing tariff barriers and creating a more balanced trade environment. He noted that while certain sectors, like agriculture, have traditionally been protected in India to support small-scale farmers, a trade agreement that includes quotas and limits could help address these concerns without fully exposing sensitive industries.

According to Lutnick, crafting a mutually beneficial agreement that allows both countries to set limits or quotas on certain products could pave the way for a fair trade relationship.

Meanwhile, India’s Trade Minister Piyush Goyal has been in the US for a nearly week-long visit, where he met Lutnick on Tuesday to further discuss the progress of the trade negotiations. Lutnick suggested that both nations could benefit from structured trade policies where certain products may have pre-defined limits or quotas, allowing for a balanced and fair trade agreement.

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