Industry willing to accept tariff reductions with US – The Times of India

NEW DELHI: As India and the US get down to working out the contours of the proposed bilateral trade agreement, amid Donald Trump’s tariff threat, domestic industry is willing to accept tariff cuts on items of its interest, while suggesting that government pursue a similar action by American authorities for products of interest to them.
Commerce and industry minister Piyush Goyal is in the US to meet commerce secretary Howard Lutnick and US trade representative Jamieson Greer and discuss how the deal can be structured, within the Fall (Sept-Oct) deadline set by PM Narendra Modi and Trump last month.

With Trump repeatedly naming India among countries with high tariffs, domestic players realise that there must be some give-and-take under the bilateral deal, although each will seek to protect its turf. Govt’s strategy will be to lower duties in some areas in return for getting concessions in areas of interest to it, such as textiles or leather.
During its discussions with govt, apparel sector has identified over 50 items of interest to India, and has suggested that tariffs could be lowered, including those that are covered by PLI, and even eliminate tariffs for some. “Govt can consider bringing down the applicable customs duty on major apparel products vis-a-vis the US… Since apparel imports into India from the US are negligible, govt may also consider offering zero-for-zero for all apparel products of our strategic interest,” said Mithileshwar Thakur, secretary general, AEPC. Zero for zero means eliminating levies in return for a similar move by the trading partner.
Similarly, the engineering goods sector – the largest segment of country’s export basket – has identified 33 items where Indian exporters ship goods worth over $1 million, including products like stainless steel angle bars and round bars, where it wants concessions. With the US raising levies on steel and steel products to 25%, it is not worried about reciprocal tariffs since India levies 7.5-15% duty. “We don’t see too much import coming, the biggest item of import is scrap, which is at zero duty,” said Pankaj Chadha, chairman EEPC India.
From the gems and jewellery sector, the proposals include slashing import duties on polished and lab-grown diamonds from 5% to 2.5%, reducing gold, silver, and platinum jewellery tariffs from 20% to 17%, and cutting duties on precious metals like gold bars from 5% to 4%.
“This policy could necessitate adjustments to maintain India’s dominance in the US market, where we hold substantial shares in cut and polished diamonds (45%), gold jewellery (24.6%), and worked lab-grown stones (92%),” said Kirit Bhansali, chairman of the Gems & Jewelery Export Promotion Council, while arguing that reciprocal tariffs could result in orders moving to competing countries, causing job loss.
While there may be pressure on the auto components sector, given the high level of protection in India, govt can make a trade off with automobiles, amid the clamour for lower duties from Trump and his close aide Elon Musk, who runs Tesla. The tricky area will be farm, poultry and dairy products, including items like chicken legs and shrimps.