Informist, Thursday, Sept. 18, 2025

NEW DELHI – The US may soon scrap the 25% penal tariff imposed on Indian goods and also lower the reciprocal tariff to 10-15% from the current 25%, Chief Economic Adviser to the Government V. Anantha Nageswaran said Thursday. As New Delhi and Washington continue their dialogues for a trade deal, Nageswaran expects that the tariff situation will be resolved in 8-10 weeks, he said.

The White House imposed 50% tariff on Indian goods in August, which includes 25% punitive duty for India's high crude oil imports from Russia. "My personal confidence is that in the next couple of months, if not earlier, we will see a resolution to at least to the extra penal tariff of 25%," Nageswaran said at a event in Kolkata. "It may also be the case that reciprocal tariff may come down to the level, which we were earlier anticipating somewhere betweeen 10% and 15%."

"Beneath the surface a lot of conversation has been happening between the two governments (of India and the US)," the CEA said. On Tuesday, India's chief negotiator for the trade deal, commerce ministry's Special Secretary Rajesh Agrawal and US Trade Representative for South and Central Asia Brendan Lynch also had an in-person negotiation in Delhi for the first time since the imposition of extra tariffs.

As of now, almost 55% of India's export basket to the US now attracts higher tariffs, which cast a long shadow on nearly $50 billion worth of Indian goods to the US from labour-intensive sectors such as chemicals and fertilisers, textile and apparel, gems and jewellery, shrimp and seafood, furniture and beddings, and machinery and mechanical appliances. Due to the tariff, India's exports to the US fell to a 10-month low of $6.87 billion in August.

The US has been India's top export destination with a share of 20% in total outbound shipment. In 2024-25 (Apr-Mar), India exported $86.51 billion worth of goods to the US and had a trade surplus of $40.82 billion. End

US$1 = INR 88.12

Reported by Krity Ambey

Edited by Akul Nishant Akhoury

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