【New Delhi, I】India-US Trade Deal: Tariffs Could Drop from 50% to 10-15%… GTRI’s Estimate, Know the Impact on the Common Man

by

Editor’s Note

This report details the recent high-level trade discussions between the US and India, characterized by both sides as positive. The talks aim to accelerate a bilateral trade agreement, set against a backdrop of ongoing global tariff negotiations.

Dwijapriya Sankashti Chaturthi 2026 LIVE: द्विजप्रिय संकष्टी चतुर्थी पर बन रहा अभिजीत मुहूर्त, जानिए पूजा का शुभ समय, मंत्र, आरती और सबकुछ
Positive Talks and Tariff Context

A team of officials from the US Trade Representative’s office arrived in New Delhi on Monday night (September 15, 2025). Following day-long talks in New Delhi on September 16 led by the US’s chief negotiator, Brendan Lynch, India’s Ministry of Commerce and Industry stated that the discussions were ‘positive’ and both sides decided to ‘intensify efforts for an early conclusion of a mutually beneficial trade agreement’. These talks are seen as a signal of moving forward after the period when the US imposed an additional 25% tariff on India from August 27. Currently, a total 50% tariff is applied on India.
This step was taken due to India’s purchase of Russian oil, which led the US to ‘pause’ trade talks. Currently, Trump has imposed a total 50% tariff on India. Negotiations on the trade deal are ongoing between the two countries, and US President Donald Trump has extended birthday wishes to Indian Prime Minister Narendra Modi. A few days ago, Commerce Minister Piyush Goyal had said that the first phase of the trade deal between the two countries would be finalized by November 2025. Amidst all this, the question is whether the 50% tariff on India will be removed after a trade deal is reached? Another question is what tax will be levied on Indian goods after a trade deal?

Q&A with GTRI Founder Ajay Srivastava

Jansatta spoke to Ajay Srivastava, Founder of GTRI (Global Trade Research Initiative) and former Indian Trade Service officer, to find answers to these questions…

Question: Will there be relief on tariffs (import duties) under the India-US trade deal?
“Certainly, the deal between the two countries is happening precisely so that tariffs drop from 50 percent to 10-15 percent or perhaps even lower.”
Question: In which direction are India and US talks on digital trade and IPR (Intellectual Property Rights) heading?
“China and India are the world’s largest data generator countries. India is the largest data supplier for the US, all their development like software and AI is from India and is very important. Therefore, they want India to never impose any restrictions or taxes on data flow. Their biggest expectation is that India maintains ‘free flow of data’. RBI’s rule is that financial data must be kept within the country’s servers, but the US does not want that. So India must look at its own interests and a solution will have to be found with mutual consent. ‘Free flow of data’ will not allow India’s development.”
Question: Will this deal support or create conflict with India’s ‘Make in India’ and ‘Vocal for Local’ campaigns?
“The India-US trade deal will have no impact on ‘Make in India’ and ‘Vocal for Local’. If there is an impact, it will only be positive because the US is not an industrial power. The US is an agricultural power or makes very high-tech things in industry – like Boeing. But in common products like textiles, leather, chemicals, the US is nowhere. Therefore, our ‘Make in India’ is threatened by imports from China, not at all by the deal with the US.”
Question: What will be the impact of this deal on the common consumer?
“The deal will have no impact on the common consumer. The government has set red lines (agriculture and dairy) and has maintained them so far and will keep them in the future. The US is not an industrial power, so there will be no impact on common customers. Very few items that are useful for common people come from the US, so the deal will have no impact for that reason too.”
Question: Will Indian products get entry into the US at more competitive prices?
“The first thing is that Trump has imposed tariffs on all countries. But the highest tariff of 50 percent has been imposed on India and Brazil. The tariff on China is only 30 percent. And suppose after the trade deal, a 15 percent tariff is applied on India, then the tariff on China and many other countries will be higher than ours. This means our products will become more competitive in the US. Since the 50 percent tariff was applied, India’s exports have been affected and have started to decline. The US is a big market for India and about 20 percent of total exports go to the US, all of that is currently at risk. But after the deal and tariff reduction, normal exports will start again. And compared to other countries, India’s products will remain more competitive.”
Red Lines in India-US Trade Deal

India will have to firmly stand its ground on agriculture and dairy, which it considers not a subject of trade but an issue of livelihood for over 70 crore farmers. India’s strategy is to eliminate tariffs on most industrial goods, which will include over 95% of US exports. But it will continue to protect politically sensitive sectors.
Issues like easing India’s patent laws, freedom of data flow, allowing US e-commerce companies to sell products on a platform model, and deep access to Indian government tenders may also be part of the trade talks between the two countries.
The biggest challenge will be how many concessions India gives without compromising its regulatory autonomy and economic sovereignty.

Key Points on India-US Trade

Continuous Decline in Exports
India’s exports to the US have declined every month since May 2025. Biggest drop in August: $6.7 billion (16.3% less than July).
Impact of Tariffs
In April, the tariff was 10%. From August 7, 25% was applied and from August 27, it increased to 50 percent. Full 50% tariff application in September raises fears of further decline.
Which Sectors Are Most Affected?
Labor-intensive industries: Textiles/Apparel, Gems & Jewelry, Leather, Shrimp, Carpets.
The US imports over 30–60% of these.
It is estimated that India could face a loss of $30–35 billion by FY 2026. About 1/3 of Indian exports (like Pharma, Smartphones) are tariff-free. But the impact on tariff-hit sectors is much deeper.
What Are Industry Demands?
Interest rate subsidy (Interest Equalization Scheme).
Faster processing of duty remission. Liquidity support so factories don’t shut down.
What is the Government’s Stance?
GST has been cut to boost domestic consumption. But an export-focused relief package has not come yet.

None
Full article: View original |
⏰ Published on: September 16, 2025