India Offers to Cut Trade Tariff Gap with US by Two-Thirds in Bid to Secure Pact

India has offered to slash its tariff gap with the US to less than 4% from 13%, in exchange for exemption from Trump's "current and potential" tariff hikes. This would reduce the average tariff differential by 9 percentage points. India has also offered preferential access to nearly 90% of goods imported from the US, including reduced tariffs on 60% of tariff lines in the first phase of the deal.

India has offered to reduce its tariff gap with the United States to less than 4%, down from the current 13%, in exchange for exemption from Trump's "current and potential" tariff hikes. This significant reduction would lower the average tariff differential by 9 percentage points. Additionally, India has proposed preferential access to nearly 90% of goods imported from the U.S., with reduced tariffs on 60% of tariff lines in the first phase of the deal [1].

The offer comes at a time when global markets are closely watching U.S.-China trade relations, with President Trump signaling potential tariff reductions on China. This development has sparked optimism in financial markets, including cryptocurrencies. The recent statement from Trump regarding potential tariff reductions on China has led to a bullish sentiment in both stock and crypto markets [1].

The proposed tariff reduction by India could have several implications for U.S.-India trade relations and the global economy. A reduction in tariffs between the two countries could lead to increased trade volumes, benefiting both economies. This could also create a more stable macroeconomic environment, which could positively impact cryptocurrency markets. Traders should monitor the progress of these talks and their potential impact on global trade dynamics.

From a trading perspective, the crypto market has shown a strong correlation with equity markets, with Bitcoin and Ethereum experiencing price increases following positive trade developments. For example, Bitcoin saw a modest increase of 2.3% to $58,200 after Trump's tariff comments, with trading volume spiking by 15% on major exchanges [1]. Ethereum also followed suit, climbing 1.9% to $2,650 during the same timeframe [1].

The correlation between stock and crypto markets underscores a broader risk-on sentiment. With U.S.-China trade tensions potentially easing, institutional investors may allocate more capital to high-growth sectors, including blockchain and digital assets. Crypto traders should monitor key levels—Bitcoin at $59,000 resistance and Ethereum at $2,700—as well as stock index movements for confirmation of sustained bullishness.

However, the risk remains that if trade talks falter, a reversal could trigger a sell-off across risk assets, including crypto. Institutional money flow, often a bridge between equities and digital assets, is also worth watching. With stock market gains pushing the Dow Jones up 0.6% by 12:30 PM EST on May 8, 2025, we may see capital rotation into Bitcoin and Ethereum as hedges or speculative plays, especially if tariff relief boosts corporate earnings in tech sectors with crypto exposure [1].

In conclusion, India's tariff reduction offer, coupled with potential U.S.-China tariff reductions, could have significant implications for U.S.-India trade relations and the global economy. Crypto traders should monitor these developments closely, as they could provide opportunities for growth in digital assets.

References:
[1] Trump Signals Potential U.S.-China Tariff Reduction: Key Implications for Crypto Markets | Flash News Detail | Blockchain.News (https://blockchain.news/flashnews/trump-signals-potential-u-s-china-tariff-reduction-key-implications-for-crypto-markets)