India–US Trade Talks Underway: What It Means for Tariffs, Trade & Tax Revenue
The India US trade relationship is once again in the spotlight as both nations enter talks to resolve ongoing tariff tensions. In a shift from retaliation to negotiation, India has opted for a diplomatic route in response to tariffs previously imposed by the US government—particularly under former President Trump’s trade measures.
This move signals a strategic recalibration in India’s global trade posture, especially with major economies like the US, and holds significant implications for businesses, exporters, and government revenues—particularly GST collections and customs duties.
🔍 What Sparked These Talks?
- The US tariffs in question were imposed as part of earlier protectionist policies affecting key Indian exports—steel, aluminum, and select pharmaceutical items.
- India, instead of imposing countermeasures immediately, has prioritized dialogue, aligning with WTO principles under GATT Article XXIV, favoring trade liberalization over retaliation.
- According to the Ministry of Commerce, the US remains India’s largest trading partner, accounting for $118.3 billion in bilateral trade in FY2024.
📊 Impact on GST & Customs Collections
India’s GST and Customs revenues are closely tied to the volume of imports and exports. In March 2025, gross GST collections surged to ₹1.96 lakh crore, growing by 9.9% YoY, as per official government data. Here’s why these trade talks matter:
| Indicator | Value (Mar ’25) | YoY Growth |
|---|---|---|
| Gross GST Revenue | ₹1,96,141 crore | 9.9% |
| GST on Imports (IGST+CESS) | ₹46,919 crore | 13.56% |
| Net Customs Revenue | ₹38,830 crore | 0.5% |
Source: Ministry of Finance GST Revenue Report – March 2025
🌐 Trade Policy Meets Tax Strategy: Legal & Regulatory Lens
India’s cautious approach aligns with past Supreme Court guidance on balancing foreign policy and economic interests. In Harakchand Ratanchand v. Union of India, the apex court emphasized that economic legislation must be in harmony with global trade norms and constitutional values.
Additionally, RBI’s Annual Trade Facilitation Report (2024) noted that resolving bilateral trade issues improves foreign investment confidence, which directly supports tax compliance and revenue base expansion.
👨💼 Who Benefits from a Successful India–US Deal?
- Exporters: Lower US tariffs could open more favorable access to textile, IT services, and medical goods.
- Importers: Easier access to US tech, machinery, and energy products will reduce landed costs and boost profit margins.
- Tax Consultants & Accountants: Surge in import/export volumes will require advisory on GST on imports, export refunds, and IGST credits.
- Freelancers & IT Professionals: A better India–US trade climate may ease visa conditions and open more US-based contracts.