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Trade officials say internal discussions aimed at

preparing for

Trump administration

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India seeks broader trade, investment deal with Trump

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Plans to offer tax cuts on farm and other key imports

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Sees opportunity to draw U.S. firms away from China

By Manoj Kumar

NEW DELHI, Dec 19 (Reuters) - India is preparing to

offer tariffs cuts on some farm and other goods mainly imported

from the U.S., aiming to clinch a broader trade and investment

deal once president-elect Donald Trump takes charge, government

and industry sources in New Delhi said.

To tackle Trump's threat of a "reciprocal tax" on Indian

goods for high tariffs, some officials of the Indian commerce

ministry are ready to consider cuts on certain products such as

pork, a senior government source said. Currently India slaps

about a 45% import tariff on pork, which is mostly supplied by

the U.S.

Tariffs could also be reduced on high-end medical devices

such as pace makers and luxury motor-cycles, including Harley

Davidson ( HOG ), said a second official with direct knowledge of trade

issues, citing the 25% to 60% tariffs on these products.

With bilateral trade between India and the U.S. exceeding

$118 billion in the 2023/24 fiscal year ending in March, and

India enjoying a $32 billion trade surplus, the country is

readying for trade talks with the U.S., aiming to clinch a

broader trade and investment deal once president-elect Donald

Trump takes office.

To address Trump's concerns over the trade imbalance,

officials have also proposed buying more LNG and defence

equipment from the U.S., the second official said.

India's energy imports from the U.S., including crude

oil, refined fuel and coal, were estimated at $12 billion in

fiscal 2024, and aircraft and parts at $2 billion. Such imports

could rise by $5 billion to $10 billion annually, a third

government source, said.

The government and industry sources spoke on condition of

anonymity because the discussions remain confidential.

A commerce ministry spokesman declined to comment.

Commerce ministry officials have previously said they would

wait for the Trump administration to take office before any

offer of trade talks, while working out plans for possible

negotiations.

Indian officials are also sensing an opportunity in

Trump's plans to impose up to 60% tariffs on Chinese imports, by

pitching India as an alternative manufacturing base.

The government has held consultations on the issue within

ministries, as well as with local think-tanks and industrial

groups, said a government source who attended some of the

meetings.

TRUMP GOOD FOR INDIA

"That is an opportunity," said Arvind Virmani, a government

adviser and member of the state-run policy think-tank NITI

Aayog.

"It is in the interest of the U.S. and India that more of

critical manufacturing or the sensitive manufacturing be done in

India rather than China," he said, adding a "preferential trade

cum investment deal," which is more ambitious than an earlier

proposed mini-trade deal, would benefit both countries.

Ajay Sahai, director general at the Federation of Indian

Export Organisations, said high tariffs on goods from China

would accelerate the process of global companies moving to

India.

"We have to do our homework... Overall the coming of Donald

Trump is definitely good for India," he said.

During Trump's first term, a proposed mini-trade deal aimed

at addressing trade imbalances and strengthening trade ties

through limited agreements faltered over disagreements on

tariffs, market access and intellectual property.

India is now seeking a broader deal, offering significant

concessions including production-linked incentives for shipping

and support for logistics companies.

"Under Trump's 'Make in America programme', India could

extend concessions for U.S. companies for manufacturing low-end

products in India for their supply chains," said Ram Singh, a

trade analyst at the state-run Indian Institute of Foreign

Trade.

In the semiconductor sector, for instance, he said,

India could become a hub for the production of low-end chips as

part of the global supply chain while U.S. companies focused on

high-end products.

Noting that India has attracted investments, such as

Apple Inc's ( AAPL ) iPhone production, the sources said the

government plans to offer further incentives in sectors like

aircraft maintenance, semiconductors, electronics and

renewables.

India also plans to allow 100% foreign direct investment in

the insurance sector, up from the current 74% in a move that

could help leading US insurers like AIG.

The plan would require parliament approval.