The United States may soon drop the 25% penal tariff on Indian goods and cut reciprocal duties to 10–15%, Chief Economic Adviser V. Anantha Nageswaran said Thursday, signaling progress in trade talks that could ease pressure on nearly $50 billion worth of Indian exports.
Speaking at an event in Kolkata, Nageswaran said he expects a resolution within 8 to 10 weeks. “My personal confidence is that in the next couple of months, if not earlier, we will see a resolution to at least the extra penal tariff of 25%,” he stated, adding that reciprocal Indian tariffs may fall “somewhere between 10% and 15%.”
The penal duties were part of a broader 50% tariff package imposed by the White House in August, largely in response to India’s continued imports of Russian crude oil. Since then, both governments have intensified diplomatic backchanneling.
“Beneath the surface, a lot of conversation has been happening between the two governments,” Nageswaran said.
Earlier this week, India’s chief trade negotiator Rajesh Agrawal met in person with Brendan Lynch, the U.S. Trade Representative for South and Central Asia, in New Delhi—their first direct meeting since the tariffs took effect.
Currently, about 55% of India’s export basket to the U.S. is subject to higher tariffs. The sectors hardest hit include textiles, chemicals, seafood, gems and jewelry, and machinery—core components of India’s labor-intensive export economy. In August, exports to the U.S. slumped to a 10-month low of $6.87 billion.
The U.S. remains India’s largest export market, accounting for 20% of outbound shipments. In fiscal 2024–25 (April–March), India exported $86.51 billion in goods to the U.S. and maintained a trade surplus of $40.82 billion.
A rollback of punitive tariffs would offer major relief to Indian exporters and mark a reset in bilateral trade relations after months of economic friction.
