India Offers Duty-Free US Imports on Chosen US Goods as it Pushes for Trade Deal

India has proposed phasing out tariffs on chosen US imports such as steel, automobile parts, and pharmaceuticals up to a specified quantity every year under the aegis of ongoing discussions for a two-way trade agreement with the US, people dealing with the development informed reporters.

The offer, proposed by Indian trade officials on a visit to Washington late last month, is to speed up a narrow trade pact before the expected end of the current 90-day suspension of tit-for-tat tariffs introduced during Donald Trump’s presidency. Negotiations are said to be targeting a sector-specific agreement by fall 2025.

Imports from the US under the agreed limits would be duty-free under the terms proposed, with volumes over those levels being subject to regular tariff rates. This “zero-for-zero” proposal is reciprocal and is intended to persuade both parties to lower barriers in specific sectors.

In exchange, Washington has expressed worry over India’s increasing application of Quality Control Orders (QCOs), which it perceives as non-tariff barriers to trade. These obligatory standards of quality target both local and foreign producers and have been blamed by US exporters for being vague and limiting.

India has signaled a desire to update QCOs in industries such as medical devices and chemicals. New Delhi has also put forward a proposal for a mutual recognition agreement (MRA) where India and the US would recognize each other’s regulatory requirements and compliance regimes.

The Indian number of QCOs has jumped from as few as 14 before 2014 to more than 140 since 2017, a precipitous increase that has attracted attention from trade partners.

The US is in the process of investigating temporary trade deals with several Asian economies, including India, South Korea, and Japan. Trump over the weekend intimated that a few of the deals would be concluded as early as this week, providing potential respite for countries looking to escape increased US tariffs as the economy contracts.

There has not yet been a response from India’s Ministry of Commerce and Industry regarding the talks.

It is still not known which of the proposals will be incorporated into the final deal.