With India ready for consultations with the US over the “early tranches” of the proposed bilateral trade agreement (BTA) this week, Indian industry has identified only a handful of sectors, including auto parts, apparel and textiles and electronics.
However, the priorities that Washington has promoted, such as automobiles, motorcycles, alcohol and agricultural products, are barely present on the list, indicating that Indian industry feels at least some protection in these sectors.
The government has been constantly consulting with exporters and industry organisations to gain input on the extent to which it is possible to meet expectations for Washington’s tariff reduction and removal of non-tariff barriers in various sectors, and to explore opportunities to explore in terms of sensitivity and gaining more market access in the United States. BusinessLine.
Rules of Origin
In order to prevent third country exports from gaining the benefit of the obligation reduction agreed under the BTA, strict rules of origin (ROO), the standard for determining the country of origin of products, is required to ensure that in accordance with submissions made by top Indian industry organisations to the commercial sector.
“Items identified by the ‘zero-zero’ industry are primarily subject to relatively high tariffs in the US and India has a manufacturing advantage,” a source told BusinessLine.
According to industry suggestions, the list of products that have “zero to zero” tariffs in India include auto parts, footwear, some chemicals, apparel, textiles and electronics.
A second group of products where a zero-to-zero and tariff reduction has also been identified, including iron and steel, the engineering products subsector, toys, gems, gems, petrochemicals, leather and some agricultural items.
“From April 23rd, there will be important discussions between trade officials from both Washington regarding the initial outcomes of tariffs within the 90-day mutual tariff suspension period. Industry inputs are important to determine the position of negotiations, including flexibility and red lines,” the source added.
US President Donald Trump has announced mutual tariffs in most countries, including 26% of India. Tariffs were put on hold for 90 days on April 9, as Trump said many countries approached the United States due to trade transactions.
ROO must submit that it must include changes to chapter headings as well as 40% value addition criteria. This ensures that items from third countries do not seem to take advantage of the priority fee benefits at first glance. However, the ROO standard can be adjusted for each case.
The US remains India’s top export destination in 2025, with $865.1 billion in exports contributing to more than 19% of the country’s exports. India’s imports from the US were $45.333 billion.
pointer
*Zero Zero Tariff Contracts could work in India in just a few sectors
*The industry proposes strict rules of origin to halt exports in third countries
*Indian teams in Washington this week negotiate an “early tranch”
* India wants to reach agreement with the US within 90-day mutual tariff suspension
Released on April 20, 2025
