As of April 23, 2025, the tariff situation in India is marked by a complex interplay of ongoing trade negotiations with the United States and recent changes implemented through the Union Budget 2025-26. Here's a detailed update: India-US Trade Negotiations and Tariffs: Bilateral Trade Agreement: India and the United States are actively engaged in discussions to finalize a Bilateral Trade Agreement (BTA) with the ambitious goal of doubling bilateral trade to $500 billion by 2030. Terms of reference for these negotiations have been finalized.   US Concerns and Tariffs: The US, under President Trump, has expressed concerns about the trade deficit with India and what it considers unfair trade practices. A 10% baseline tariff on imports from most countries, including India, is currently in effect since April 5, 2025. This is a temporary measure to allow for trade talks.   Higher, individualized reciprocal tariffs were scheduled to take effect on April 9, 2025, on countries with the largest trade deficits with the US. The exact rates for India under this category are not explicitly stated but could be significant. Some reports mentioned a potential 26% levy on Indian goods.   However, there's a 90-day pause on these higher "reciprocal" tariffs for most countries except China, extending until July 8, 2025, providing a window for negotiations.   The US has exempted pharmaceuticals from these new tariffs, which is considered a positive development for India's strong pharmaceutical sector.     India's Stance: India has been signaling its willingness to negotiate and has already made some concessions, including reducing tariffs on certain luxury goods like bourbon and high-end motorcycles.   US Expectations: The US is seeking greater market access for its agricultural and dairy products in India, along with increased sales of defense equipment and energy resources.   Defense Cooperation: Alongside trade talks, the US and India are also looking to strengthen their defense partnership, with potential sales and co-production of advanced military gear, including fifth-generation stealth fighter jets, being discussed.   Changes in India's Import Duties through Union Budget 2025-26: The Union Budget 2025-26, announced on February 1, 2025, brought about several changes in India's customs tariff structure:   Rationalization of Tariff Slabs: The government is continuing its efforts to simplify the tariff structure by eliminating seven additional customs tariff rates for industrial goods, reducing the total number of slabs to eight (including a zero rate).   Capping of Cesses and Surcharges: The budget recommends limiting levies to a single cess or surcharge per item and exempting the social welfare surcharge on 82 tariff lines subject to a cess.   Exemptions on Life-Saving Drugs: The list of medicines exempt from Basic Customs Duty (BCD) has been expanded, with 36 new life-saving drugs added to the fully exempt category and customs duty reduced to 5% for six more drugs. Exemptions have also been extended to 37 additional medicines under Patient Assistance Programs.   Customs Duty Exemptions to Boost Domestic Manufacturing: EV and Mobile Phone Battery Production: Exemptions on capital goods for the production of EV batteries (35 items) and mobile phone batteries (28 items) aim to promote domestic manufacturing in these sectors.   Critical Minerals: Full BCD exemptions are now applicable to cobalt powder, lithium-ion battery waste, lead, zinc, and 12 other critical minerals to ensure a stable supply for related industries.   Shipbuilding: Raw materials for ship manufacturing will be exempt from BCD for the next 10 years to bolster the domestic shipbuilding industry.   Leather Industry: Imports of wet blue and crust leather are now exempt from BCD, and a new scheme has been launched to support the leather and footwear sector.   Changes in Duty Rates for Specific Goods: Reduction: High-end motorcycles (engine capacity up to 1,600 cc, imported as Completely Built-Up units): Duty reduced by 10% to 40%. Semi-Knocked Down (SKD) kits of motorcycles: Duty reduced to 20% (from 25%). Completely Knocked Down (CKD) units of motorcycles: Duty reduced to 10% (from 15%).   Luxury cars (priced above $40,000): Duty reduced to 70% (from 125%).   Lithium-ion batteries for electric vehicles: Basic customs duties fully scrapped. Open cells for LED/LCD TV manufacturing: Duty reduced to 5%. Input parts for LED/LCD TV manufacturing: Duty reduced to 0%. Glycerol: Tariff rate reduced from 30% to 20% (effective May 1, 2025). Marble and travertine, granite (crude or roughly trimmed): Tariff rate reduced from 40% to 20% (effective May 1, 2025). Liquefied Propane and Butane: Tariff rate reduced from 15% to 2.5%. LPG (non-automotive and automotive purposes): Tariff rate reduced from 15% to 5%. Boric acid: Tariff rate reduced from 27.5% to 7.5% (effective May 1, 2025). Certain items under subheading 2933 59: Tariff rate reduced from 10% to 7.5% (effective May 1, 2025).   Increase: Interactive flat panel displays: Customs duty increased from 10% to 20%.   Knitted fabric: BCD rate revised to '20% or INR 115 per kilogram, whichever is higher'.   Overall Context: These tariff adjustments and ongoing negotiations reflect India's strategy to balance its trade relationships, encourage domestic manufacturing, and potentially mitigate the impact of US trade actions. The coming months will be crucial in determining the trajectory of the trade relationship between India and the United States as they aim to finalize a mutually beneficial trade agreement amidst a complex global trade landscape.