India Inc pushes for zero-to-zero tariffs on steel, aluminum, auto via BTA with US
NEW DELHI : Indian industry seems confident to take on imports from the US across several sectors, including chemicals, steel products, aluminium, automobiles and auto components, engineering goods, electronics, food processing and pharmaceuticals.
While, the domestic industry is pushing for a zero-to-zero tariff regime on products that attract sectoral duties from the United States such as steel, aluminium, automobile and auto parts through the proposed trade deal, for agriculture and food processing, they are batting for reduction in duties on a reciprocal basis, sources in the know of matter told Moneycontrol.
India Inc is also ready for tariff reductions on chemicals, engineering goods, electronics, pharmaceuticals and food processing through the proposed trade deal in return for similar cuts from the US, one of the sources said.
“In a recent meeting with the commerce ministry, Industry leaders expressed confidence while pitching for a zero-to-zero tariff policy. The Indian side also wants value addition norms to be strictly enforced to prevent re-routing of goods from the US.Industry has asked the government to include steel and steel products, aluminium, auto and auto components in the talks for the trade deal. We are ready to lower tariffs to zero, so US can eliminate duties on these items too. Both sides will will have to agree for this,” a second source said.
India is expected to lower tariffs in these areas ‘substantially’, the first source said, if not go for zero-to-zero. Aerospace will also be a major point of discussion.
US President Donald Trump’s administration has levied a 25-percent sectoral tariff on steel, aluminium, automobiles and auto parts coming into America from all nations.
While Trump on April 9 paused the country-specific tariffs on all nations, barring China, including an additional 16 percent reciprocal levy on India, the baseline tariff of 10 percent and certain sectoral duties have started to spell trouble for Indian exporters.
“Exporters are facing pushback on price negotiations and shipments are getting held up, so these sectoral tariffs are having an impact especially on Indian steel and aluminium exports,” the second source added.
To be sure, some experts see minimal impact on Indian exports of steel and aluminium as well as automobiles due to these higher levies.
Back in March, the steel secretary Sandeep Poundrik said that no major impact is expected from US tariffs as India exports less than 100,000 metric tonnes to America.
And, India exported a modest $8.9 million worth of vehicles to the US in 2024, compared to $6.98 billion in global exports — meaning just 0.13 percent of the country’s car exports are US-bound.
India and the US are looking to conclude negotiations for the first tranche of the proposed bilateral trade agreement (BTA) well before the agreed timeline of the autumn of 2025, after both nations signed the terms of reference for the pact, the commerce ministry said on April 15.
The BTA is part of a new goal – Mission 500 – aiming to more than double bilateral trade between the two countries to $500 billion by 2030.
In 2024-25, India’s main exports to the US included drug formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).
In FY25, the US again emerged as India’s top export destination, with an 11.6 percent growth in shipments at $86.51 billion. America was India’s fourth-largest import source nation at $45.33 billion, up 7.4 percent from the previous year.
Source : Moneycontrol