Mint Primer: Can a ‘zero-for-zero’ approach thwart reciprocal tariffs?

Subscribe to enjoy similar stories. A ‘zero-for-zero’ tariff approach is being touted as the best way for India to deal with US President Donald Trump’s proposed reciprocal tariffs. Mint explains what this initiative is and why some consider it to be a better option than a bilateral trade agreement.

This is an approach that has been suggested for India to effectively deal with the reciprocal tariffs that the US has threatened. It involves India identifying specific tariff lines or product categories and eliminating import duties on them. In response, the US can eliminate tariffs on a comparable number of goods.

This way India’s high average tariff, a point US President Donald Trump has repeatedly talked about, would reduce sharply. And if reciprocal tariffs are still applied, the impact will either be low or close to zero for India. Experts argue that zero-for-zero is better than signing a bilateral trade agreement.

Also read | Trump tariffs: Is the US president doomed to repeat history? Any bilateral trade agreement will take time to be negotiated, and it is unlikely to thwart the reciprocal tariffs that the US government has threatened to levy. Global Trade Research Initiative, a think tank that mooted the concept of a ‘zero-for-zero’ tariff approach, has said that a bilateral trade agreement will also force India to deal with issues such as opening up its protected agriculture sector for which it is not ready. Farming employs millions of poor in India.

On the other hand, a zero-for-zero deal can be struck quickly, avoiding contentious issues. If the US agrees, a deal can be signed before reciprocal tariffs come into effect. From 2 April, says Trump.