U.S. Urges India to Lower Tariffs, Buy More Defense Products for Trade Deal
Washington — The United States has called on India to reduce import tariffs and increase defense purchases from American suppliers to finalize a comprehensive bilateral trade agreement, U.S. Commerce Secretary Howard Lutnick told India Today television on Friday.
Speaking from Washington, Lutnick criticized India’s high import tariffs—among the steepest globally—and urged New Delhi to reassess its “special relationship” with the U.S. He also pressed India to shift its defense acquisitions away from Russia and toward more advanced American systems.
His remarks come just weeks ahead of U.S. President Donald Trump’s planned reciprocal tariffs, set to take effect in April, which have sparked concerns across various industries, from automobiles to electronics.
Push for Lower Tariffs and Market Access
Lutnick emphasized the need for a direct India-U.S. trade dialogue to reduce tariffs and open up sensitive sectors like agriculture. While acknowledging India’s long-standing protectionist stance in agriculture, he suggested implementing quotas and limits rather than maintaining broad restrictions.
“We want to craft a deal that makes sense for both of us,” Lutnick said, adding that Washington expects India to bring most tariff rates to zero or negligible levels, except in agriculture. The U.S. currently faces a $45.6 billion trade deficit with India, with Washington’s trade-weighted tariff averaging 2.2% compared to India’s 12%, according to WTO data.
Following a recent meeting between Trump and Indian Prime Minister Narendra Modi, both nations agreed to resolve tariff disputes and work toward an initial trade agreement by fall 2025, with a goal of reaching $500 billion in bilateral trade by 2030. Indian Trade Minister Piyush Goyal is currently in the U.S. for negotiations, having met with Lutnick earlier this week.
Call for Defense Diversification
Lutnick also urged India to reduce its dependence on Russian defense equipment, advocating for increased procurement of U.S. military hardware.
“India has historically bought significant amounts of its military equipment from Russia, and we think that needs to end,” he stated.
Last month, after Modi’s visit to Washington, Trump announced that the U.S. would boost military sales to India starting in 2025, with plans to eventually provide F-35 fighter jets. Since 2008, India has purchased over $20 billion worth of U.S. defense products.
Tariffs and Inflation Debate
Addressing concerns over the impact of tariffs on inflation, Lutnick dismissed any link, stating, “Inflation only comes from running deficits and printing money. Tariffs have not created inflation in India, so that argument is nonsense.”
He reiterated the Trump administration’s focus on reshoring manufacturing to the U.S., even if it requires imposing a 25% tariff on foreign competitors.
With high stakes in trade and defense, negotiations between India and the U.S. are expected to intensify in the coming months as both nations aim to finalize a mutually beneficial agreement.
