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Indian Prime Minister Modi is planning to implement new tariff reductions before his upcoming meeting with President Trump this week, a move that could enhance U.S. exports to India and prevent potential trade tensions, according to government sources.

The Prime Minister’s two-day visit, beginning Wednesday, comes at a crucial time as Trump contemplates implementing reciprocal tariffs on various nations, including a 25% levy on all steel and aluminum imports from America’s largest trading partner.

Previously, Trump has described India as a “very big abuser” in trade matters and encouraged the nation to increase its purchases of American security equipment to create a more balanced trading relationship.

According to three government officials who requested anonymity due to lack of media authorization, India is evaluating tariff reductions across approximately twelve sectors, including electronics, medical and surgical equipment, and chemicals, to boost American exports in alignment with New Delhi’s domestic manufacturing objectives.

Official responses were not received from India’s trade and foreign ministries or the prime minister’s office when contacted outside working hours.

“This visit will be an opportunity to build upon the successes of our collaboration in his (Trump’s) first term,” Modi stated on Monday, adding that the partnership could be strengthened in areas such as technology, trade, defense, energy, and supply chain resilience.

The unnamed officials revealed that India is considering concessions on products primarily sourced from the U.S. or items with potential for increased American imports, such as dish antennas and wood pulp. The bilateral trade volume surpassed $118 billion in fiscal 2023-2024, with India maintaining a $32 billion surplus.

Two government officials indicated that Modi plans to discuss tariffs with Trump and is receptive to exploring a potential mini trade deal. A third official explained that the early visit aims to prevent a “trade war-like situation that is happening between the United States and China.”

However, recent deportations of Indians from the U.S. have cast a shadow over the meeting. Trump has already imposed broad 10% tariffs on Chinese imports, prompting Beijing to retaliate with duties on American energy products.

These tariff discussions follow India’s recent budget modifications, which reduced average import tariff rates from 13% to 11% on various items, including high-end motorcycles and luxury vehicles. The country is also evaluating surcharges on more than 30 items, including luxury cars and solar cells.

Indian market indices experienced a 0.8% decline, with the metals sector dropping 3% following news of Trump’s proposed steel and aluminum tariffs. An industry official, speaking anonymously due to the sensitive nature of the matter, stated that nearly 20% of India’s engineering goods exports – including steel and aluminum worth approximately $25 billion – could be affected if Trump implements the proposed 25% tariff.

“We are in a wait-and-watch mode and hope the issue can be amicably resolved during Prime Minister Narendra Modi’s visit,” the official said.