India: Tariff relief supports trade talks – ING

FXStreet Insights Team FXStreet

ING’s Deepali Bhargava highlights that India is a notable beneficiary of the US tariff reset, with the removal of elevated IEEPA surcharges further reducing its effective tariff burden after earlier cuts. This change coincides with ongoing negotiations on an interim India‑US trade deal and may strengthen India’s bargaining position while easing pressure on previously vulnerable sectors.

IEEPA removal strengthens India’s position

"The removal of elevated IEEPA tariffs delivers a significant reduction in India’s effective tariff burden. President Trump had already lowered the punitive 50% tariff on India to 18%, and the elimination of IEEPA surcharges takes this relief a step further. Earlier this month, India and the US issued a joint statement announcing an interim trade deal, though the detailed terms are still being negotiated."

"In this context, the Supreme Court ruling arguably improves India’s negotiating position. With the IEEPA threat now off the table, India gains more room to re‑examine elements of the interim agreement that may have been difficult to accept previously. The shift also eases pressure on sectors that had been vulnerable to punitive IEEPA treatment, providing India with a bit more leverage – and breathing space – as talks continue."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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