Why a ‘Zero-for-Zero’ Tariff Deal Between India and the US Is Unlikely?
Unequal Partners, Unequal Expectations
A complete “zero-for-zero” tariff agreement between India and the United States is unlikely under the current bilateral trade discussions, according to officials cited by PTI. Such an arrangement, where both nations agree to eliminate tariffs on the same category of goods, is generally seen between countries with similar economic maturity—such as the US and the European Union. In contrast, India and the US are at vastly different levels of economic development.
Finding multi-bagger stocks is essential for building wealth. Discover potential multi-baggers at Sovrenn Discovery.
What Triggered the Talks?
The renewed interest in trade negotiations followed former US President Donald Trump’s announcement of a “reciprocal tariff” policy on April 2, 2025. In response, some analysts speculated that India might counter with a zero-for-zero tariff proposal. However, officials clarified that the trade deal currently under discussion would be structured as a comprehensive package agreement. This means negotiations will not be based on mirrored tariff cuts but instead focus on each country’s trade interests, factoring in developmental priorities and domestic sector sensitivities.
Investing has built enormous wealth for several HNI investors. Learn investing FREE OUSARGE at Sovrenn Education.
Sector-Specific Focus Areas
India and the US are preparing to hold sector-specific discussions in the coming weeks. India is expected to seek tariff concessions in areas such as textiles, gems and jewellery, leather, plastics, chemicals, oilseeds, shrimp, and horticulture products. These are sectors where India has strong export potential and job linkages. On the other hand, the US will likely push for market access in industrial goods, electric vehicles, wines, dairy, petrochemical products, and other agricultural commodities.
Trade Snapshot
Recent data from the Ministry of Commerce & Industry shows that India’s trade performance remains steady. Between April 2024 and February 2025, India’s goods exports reached $395.63 billion, marginally up from $395.38 billion in the same period the previous year. Services exports showed stronger growth, reaching $354.90 billion compared to $311.05 billion a year ago. India’s export profile includes a diverse mix of products such as electronic goods, tobacco, coal, and earth minerals. Key export destinations include the United States, Australia, Japan, and Brazil, underscoring India’s growing integration into global supply chains.
Conclusion: Realism Over Reciprocity
While the idea of a zero-for-zero tariff pact may sound ideal in trade theory, its practical execution demands recognition of economic realities. For India, indiscriminate tariff elimination could expose its developing sectors—particularly MSMEs and agriculture—to stiff global competition. Therefore, Indian negotiators are expected to pursue a balanced, sector-based approach. The goal will be to expand bilateral trade while safeguarding domestic industries and preserving the country’s long-term economic interests.
Also Read: Trump Raises China Tariffs to 125%, Gives 90-Day Relief to Other Countries
