The United States has reportedly asked India to eliminate tariffs on nearly all goods except agricultural products, according to a CNBC-TV18 report on March 6. If India accepts this demand, it would mean removing key trade protections while receiving little in return. The proposal has raised concerns in India, as it comes amid escalating trade tensions between the two countries.US President Donald Trump has been vocal in his criticism of India’s trade policies, repeatedly labeling them as "unfair." He recently announced that new reciprocal tariffs would take effect on April 2, warning that India will not receive any special treatment. This move has intensified negotiations, with Indian officials now working to find a middle ground before the deadline.
 

US Demands vs. India's Resistance

The latest trade demand follows Prime Minister Narendra Modi’s visit to the White House last month, where Trump highlighted India’s high tariffs as a major issue. Since then, Commerce Minister Piyush Goyal has been in discussions with the US Trade Representative and Commerce Secretary, trying to reach a mutually beneficial agreement.However, sources indicate that the US is not offering any significant concessions in return. The American side insists that India should lower its tariffs unilaterally, a demand that Indian negotiators find difficult to accept.A key point of contention is the automobile sector, where the US expects India to eliminate import duties on foreign cars. Currently, India imposes high tariffs on imported vehicles to protect its domestic auto industry. While the Indian government is reportedly considering a reduction in these tariffs, it has made it clear that bringing them down to zero is not an option at this stage.
 

Auto Sector and Other Trade Barriers

The auto sector has been one of the most contentious aspects of the US-India trade discussions. The US has long pushed for a reduction in India’s high import duties on foreign cars, arguing that they restrict American automakers from competing fairly in the Indian market.India, however, has maintained that its tariffs are necessary to protect its growing automobile industry. Domestic automakers have also voiced concerns that lowering tariffs drastically could harm local manufacturers and discourage investment in domestic production. Indian officials recently held discussions with leading car manufacturers to explore the possibility of reducing import duties, but a zero-duty policy remains off the table.Apart from the auto industry, other sectors such as pharmaceuticals, electronics, and medical devices have also been points of contention. The US has urged India to lower duties on these goods, claiming that the current structure places American companies at a disadvantage. India, however, argues that its tariffs help maintain a level playing field for domestic producers.
 

Rising Pressure as April 2 Deadline Nears

With the April 2 deadline for the new US reciprocal tariffs fast approaching, pressure is mounting on both sides. India is facing the challenge of maintaining a favorable trade relationship with the US while also protecting its domestic industries from an influx of foreign competition.Experts believe that India is unlikely to agree to the US demands without securing some form of concession in return. The Modi government has taken a cautious approach, ensuring that any tariff reductions do not negatively impact domestic businesses.For now, the trade standoff remains unresolved, and discussions are expected to continue in the coming weeks. Whether both nations can reach a compromise before Trump's tariffs take effect remains uncertain. If no deal is reached, India may face higher tariffs on its exports to the US, potentially impacting sectors like textiles, steel, and engineering goods.As negotiations progress, businesses in both India and the US are watching closely to see whether a middle ground can be found or if the trade dispute will escalate further.