India Proposes Zero Tariffs On Steel, Auto Parts & Pharma In U.S. Trade Talks

(MENAFN- KNN India) New Delhi, May 6 (KNN) India has put forward a proposal for zero tariffs on steel, auto components, and pharmaceuticals during recent trade negotiations with the United States, according to sources familiar with the discussions.

The proposal operates on a reciprocal basis and would apply up to specified import thresholds, beyond which standard duty rates would apply.

The offer was presented by Indian trade officials during their visit to Washington in late April, as both nations work to expedite a bilateral trade agreement expected to be finalised by autumn this year.

Sources indicate that negotiators are focusing on specific sectors to reach an early agreement before the conclusion of the 90-day pause on President Donald Trump's retaliatory tariffs.

Against the backdrop of economic contraction in the United States, President Trump suggested on Sunday that certain trade deals could be concluded as early as this week, potentially offering relief to trading partners seeking to avoid elevated U.S. import duties.

Several Asian economies, including South Korea, Japan, and India, are reportedly leading efforts to secure interim agreements with the U.S. administration.

India's Ministry of Commerce and Industry did not immediately respond to requests for comment on the matter.

The zero-tariff proposal was developed following consultations with export organisations, which indicated that mutual elimination of duties on industrial goods would not adversely affect local industries or their competitive positioning.

"We are comfortable with the zero-for-zero tariff offer as Indian products are extremely price competitive," stated Pankaj Chadha, Chairman, Engineering Exports Promotion Council. "I don't see any impact if the duties are slashed. However, it has to be on a reciprocal basis."

According to India's trade ministry data, the country exported pharmaceuticals worth USD 10.5 billion and engineering goods valued at USD 19.1 billion to the United States during the 2024-25 fiscal year.

The United States has also raised concerns regarding India's Quality Control Orders (QCOs), which American officials consider non-tariff barriers to trade.

These mandatory quality standards establish benchmarks that both domestic and foreign manufacturers must meet before selling products in India, but have faced criticism for alleged lack of transparency and inequitable implementation.
Sources indicate that India has expressed willingness to reconsider existing QCOs in sectors such as medical devices and chemicals.

Additionally, India has proposed signing a mutual recognition agreement with the United States, under which both nations would accept each other's regulatory standards and practices.

It remains unclear whether these proposals will be incorporated into the final agreement.

(KNN Bureau)

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