India Wants Lower Tariffs Than Indonesia in Trade Deal Talks with US

India is pushing for lower import tariffs than those offered to Indonesia as it edges closer to finalising a key trade deal with the United States. With negotiations gaining momentum, especially after positive remarks from former US President Donald Trump, the spotlight is back on how both countries plan to balance strategic partnerships with market access demands.

What’s India Asking For
India has reportedly asked for better terms than what the US offered Indonesia in previous trade pacts. Specifically, India wants lower tariffs on its key export items, including textiles, pharmaceuticals, and certain manufactured goods.

The goal is clear: make Indian goods more competitive in the US market compared to regional players like Indonesia or Vietnam.

Why It Matters for Tier 2 Cities
This demand isn’t just about numbers on paper. If approved, it could directly benefit small and mid-sized exporters from Tier 2 hubs like Surat (textiles), Ludhiana (garments and bicycle parts), and Indore (pharma). These cities are home to thousands of MSMEs that could see a boost in demand and better margins if duties are slashed.

Cheaper entry into the US market could also mean more job creation and stronger cash flow for local industries struggling post-pandemic.

US Position and Political Backdrop
The US, especially under Trump-era trade frameworks, has historically demanded higher access to Indian markets for American dairy, tech, and agriculture. India, however, has resisted several of those demands due to domestic industry concerns.

With Trump now claiming the countries are “very close” to a trade deal, Indian negotiators are trying to extract the best possible terms before any agreement is signed.

Challenges on Both Sides
Trade experts say while India’s request is ambitious, it’s not impossible. But negotiations won’t be smooth. The US will likely seek some concessions in return — possibly in the form of greater digital trade openness or easing certain investment restrictions.

For India, the real test lies in protecting domestic producers while unlocking new export potential.

Conclusion
India’s move to secure lower tariffs than Indonesia signals a strong intent to reposition itself in global trade. If successful, this could reshape opportunities for exporters beyond big metros, creating real impact in Tier 2 cities. For now, all eyes are on how far both nations are willing to go to strike that final deal.