Not right for India, ‘Zero-for-Zero’ tariff model … Sources told how to talk to America

India US Trade Deal: The ‘Zero-for-Zero’ tariff model will not be included in the proposed bilateral trade agreement between India and the US. According to government sources, such a strategy is not practical due to a big difference in the level of economic development of the two countries.

Work on big package deal

Under the ‘Zero-for-Ziro’ model, the two countries completely eliminate tariffs on each other’s products. But officials say that such agreements are possible between developed countries like America and European Union, not with a developing country like India.

A senior official told PTI that the trade deal is not on the basis that “if the US removes the tariff on electronics, we will also remove.” He said that India and America are working towards a comprehensive package deal, which will include issues like goods, services and non-tariff barriers.

The negotiation of this deal started in March 2025 and its first phase has been targeted to be completed by September -October. At present, there is a trade of about $ 191 billion between India and the US, which is targeted to take up to $ 500 billion by 2030.

India in better position

Currently, there are yet to have sector -boggling discussions between the two countries. The Government of India believes that it is in a state of better preparation for business agreements compared to other countries. At the same time, the concept of ‘Zero-for-Ziro’ was introduced by Delhi-based think tank ‘Global Trade Research Initiative’ (GTRI), but the Indian government is now looking forward to a balanced and comprehensive dialogue.

The major demands of the US in this conversation include industrial products, electric vehicles, wine, petrochemicals, dairy and agricultural products such as apples, nuts and alfalfa. At the same time, there is a demand for concession in tariffs on labor intensive sectors like Textile, Garment, James and Jemes and Jewelery, Leather, Plastic, Chemicals, Oil Seeds, Shrimp and Horticulture.

$ 35 billion trade surplus from America

Let us tell you that America has been the biggest business partner of India for the last three years. In 2023-24, India recorded a $ 35.3 billion trade surplus with the US. India’s top exports consisted of medicines ($ 8.1 billion), telecom equipment ($ 6.5 billion), precious gems ($ 5.3 billion) and petroleum products ($ 4.1 billion). At the same time, India imported products such as crude oil ($ 4.5 billion), petroleum ($ 3.6 billion), coal ($ 3.4 billion) and aerospace parts ($ 1.3 billion) from the US.

Overall, the Indo-US trade agreement will not be based on any unilateral concessions, but is being created from a long-to-long and strategic point of view, which will be designed keeping in mind the domestic priorities and global trade balance of the two countries.

Also read: US-China Trade War: America-China trade war can become a threat to India, Moody’s increased concern