‘Zero-for-Zero’ tariffs unlikely under proposed India-US bilateral trade agreement: Report

A “zero-for-zero” tariff trade deal is unlikely under the proposed India-US bilateral trade agreement as the two countries are at different levels of economic development, reported the news agency PTI, citing officials aware of the development on Sunday, April 13. 

This comes after some trade experts earlier suggested that India will likely propose a 'zero-for-zero' tariff trade policy with the US in response to Donald Trump's ‘reciprocal tariff’ hike announced on April 2, 2025.

The officials cited in the agency report also said that the agreement between India and the US will be a “package deal” which can include goods and non-tariff barriers.

“It does not happen like this that if he will do ‘zero’ in electronics, we will also do in electronics. Trade agreements do not happen like this. It is a wrong thinking,” officials told the news agency.

Since March 2025, India and the United States have been engaged in negotiating a trade deal. The officials also highlighted that a zero-for-zero tariff trade deal between the US and the European Union (US) can be possible as both partners are developed and advanced nations.

“The work has started for the agreement. India is far ahead of other countries in negotiating a trade deal,” said the official on the progress of the India-US trade deal, as per the agency report.

India-US specific sector trade deal

India and the United States are set to hold a sector-specific discussion in the upcoming weeks under the bilateral trade agreement, according to the agency report.

In a trade agreement, two countries can significantly reduce or eliminate customs duties on maximum number of goods traded between them, in turn increasing the bilateral trade and boosting investments into the nations. 

India will be looking out for tariff cuts in sectors like apparel, textiles, gems and jewellery, leather, plastics, chemicals, oil seeds, shrimp, and horticulture products, while the US will be looking for concessions in industrial goods, automobiles (electric vehicles particularly), wines, petrochemical products, dairy, and agriculture items, according to the report.

According to the Ministry of Commerce & Industry data, India's goods exports were at $395.63 billion as of February 2025, compared to its $395.38 billion levels in the same period a year ago.

The data also showed that India's services export till the month of February in the 2024-25 fiscal was at $354.90 billion, compared to its one-year ago levels of $311.05 billion.

India's exports heavily rely on products like tobacco, electronic goods, coal, and other earth minerals, and nations like Australia, the US, Japan, and Brazil, are among the biggest importers of the goods sold by the South Asian nation.