Commerce Minister Piyush Goyal embarks on US trip for trade talks

Strap: Reciprocal tariffs to kick in from April, India hopes for a respite

Surabhi

As commerce and industry minister Piyush Goyal commences his visit to the United States to initiate talks on the bilateral trade pact, concerns remain about the impact of reciprocal tariffs. Goyal, who is expected to be in the US till the end of the week, is slated to meet US trade representative (USTR) Jamieson Greer and US commerce secretary Howard Lutnick.

Following Prime Minister Narendra Modi’s meeting with US President Donald Trump in Washington last month, the two countries had decided to negotiate the first tranche of a bilateral trade agreement by fall of this year.

Following Goyal’s visit, officials from the two countries are expected to continue negotiations on the trade talks. India has already cut customs duties on several imports followed by duty cuts on bourbon whisky ahead of PM Modi’s visit.

According to sources, India could look at further duty cuts as part of the trade agreement but would also look at some leeway and relaxation from the US as well. The commerce ministry has also sought input from other ministries on possible tariff cuts and their impact.

A report by the Global Trade Research Initiative noted that India must highlight to the US that its tariffs are compliant with the norms laid out by the World Trade Organization.

Trump’s proposed reciprocal tariffs will come into effect from April and there remain concerns among industry and economists on its impact on India’s exports and overall growth prospects.

As per a recent report by India Ratings and Research, should reciprocal tariffs be imposed by the US India’s exports to the US may decline anywhere between $2 billion to $7 billion in FY26. As per the agency’s assessment, textiles, chemicals (including pharmaceuticals), export-oriented jewelry & gems, auto components and electronics are more exposed to the tariff imposition. Despite large tariff differentials, food products (including vegetables, meat, fish etc.) and footwear would be relatively less exposed, given the small size of the trade with the US. 

The US is India’s largest trading partner with more than $190 billion in trade and accounts for nearly 18% of India’s exports.