India Looks to Finalise Trade Deal With Zero-Tariff Offer on US Steel, Pharma, Auto Parts

India has proposed to charge zero tariffs on steel, auto components and pharmaceuticals from the US on a reciprocal basis, Bloomberg reported, citing people familiar with the matter. Zero-duty access would apply to a specified quantity. Beyond the limit, imported industrial goods would attract the regular level of duties.

The offer was made by Indian trade officials visiting Washington late last month to expedite negotiations on a bilateral trade deal expected by fall this year, the people said. India made the offer after consulting with export organisations. They said that mutually eliminating duties on industrial goods would not impact local industries or their competitiveness.

On the other hand, Washington has asked India to resolve its concerns around Quality Control Orders, which it considers a non-tariff trade barrier for its exports, the people said. The mandatory quality standards, which lay down benchmarks that both local and foreign manufacturers must meet before selling their goods in India, have been criticised for being non-transparent and unfair.

India has expressed willingness to review its existing Quality Control Orders (QCOs) in sectors like medical devices and chemicals. Additionally, it has proposed signing a Mutual Recognition Agreement (MRA), allowing both countries to accept each other’s regulatory standards and practices—potentially easing compliance burdens for exporters on both sides.

India is one of the few countries which has been actively making efforts to avert US President Donald Trump's "reciprocal" tariffs even before he made the official announcement on April 2.

India's Export Value

As per the latest trade ministry data, India exported pharmaceuticals worth $10.5bn and engineering goods worth $19.1bn to the US in 2024-25. Indian pharma companies export about 50–60% of their total medicine volumes to the US.

In 2023, India was the eleventh largest supplier of auto and auto components to the US, with exports amounting to $2.5bn. In terms of auto components, 29.2% of India’s exports were headed to the US.

India's exports of iron and steel to the US were $488.28mn during 2024, according to the United Nations COMTRADE database on international trade.