Could preferential US tariffs unlock India’s next export opportunity? Trade negotiators are racing to secure a deal with implications for the growth of electronics manufacturing.
India is seeking preferential tariff treatment from the United States (US) as negotiations continue on an interim bilateral trade agreement, with the central government arguing that any proposed duty structure must remain competitive with those offered to rival exporting nations.
According to a Reuters report, an Indian trade official, speaking on condition of anonymity due to the confidential nature of the discussions, said the tariff issue remains central to the agreement’s conclusion. According to the official, India is seeking tariff rates that would not place its exporters at a disadvantage relative to competitors in global markets.
The development comes after India and the US reached a preliminary understanding on a trade arrangement in February 2026. However, progress slowed following legal developments, including the Section 301 probe in the US that affected the implementation of President Donald Trump’s broader tariff measures.
Washington has since proposed an additional 12.5 per cent tariff on imports from India and several other countries, citing concerns related to the alleged use of forced labour. The US is also considering separate duties on India, arguing that some sectors, including textiles, have excess production capacity and are exporting volumes that could affect American industries.
Indian officials are also seeking assurances that any future trade agreement would protect the country from additional tariffs imposed after the deal is signed.
Trade discussions gained momentum last week when a US delegation led by Brendan Lynch held three days of meetings with Indian officials in New Delhi.
The negotiations are being closely watched by India’s electronics manufacturing sector, which has emerged as a major driver of export growth under the government’s production-linked incentive (PLI) programmes.
Industry stakeholders view tariff stability and improved market access to the US as important factors for sustaining growth in electronics exports, particularly as India seeks to position itself as an alternative manufacturing destination.
Last week, Piyush Goyal, the Union Minister of Commerce and Industry, said both sides were working towards concluding the first phase of a bilateral trade agreement by mid-July 2026.
