US tariff likely to be lowered to 15-20%, say top economists

Despite inflation at an all-time low, opinion divided over whether central bank will go for a rate cut in December

- CHRISTINA TITUS, KSHIPRA PETKAR & MAHESH NAYAK

ECONOMISTS EXPECT RECIPROCAL US tariffs on Indian exports to be lowered to 15%- 20% by the end of December as there seems to be some concrete movement from both governments.

Importantly, most believe the additional 25% penalty duty, imposed on August 27, is on its way out after India moderating its oil imports from Russia. “If the deal is well-negotiated, the overall tariff burden could fall to 15%, aligning India with other Asian peers and unlocking significant macroeconomic gains,” said Tanvee Gupta Jain, chief India economist, UBS.

Agreed Madan Sabnavis, chief economist at Bank of Baroda, who believes the tariff talks are moving in the right direction. “There is reason to believe that the 50% duty could come down to 25%, and even further to 15% depending on how much we give and take,” he said. He pointed to India’s diversification of oil imports from Russia to Saudi Arabia, Iraq and the US as a strategic lever.