NEW DELHI — India and the United States are working towards lowering trade barriers and reaching a bilateral trade deal this year. The two countries have set a target of increasing bilateral trade to $500 billion by 2030, and are determined to achieve this goal through increased market access, reduced tariffs and nontariff barriers, and deeper supply chain integration.
According to External Affairs Ministry spokesperson Randhir Jaiswal, the objective of the bilateral trade agreement is to strengthen and deepen the trade relationship between India and the U.S. in the goods and services sector. This includes addressing issues such as high tariffs and nontariff barriers that have been a point of contention between the two countries.
U.S. President Donald Trump has been vocal about his concerns over India’s trade policies, accusing the country of imposing unfair trade barriers through high tariffs. He has put pressure on India to lower duties on U.S. imports, citing examples such as the 110% tariff on all car imports. However, India has taken a conciliatory approach and has opted to engage in talks with the U.S. to avoid any potential friction.
During a recent White House meeting, Trump stated, “India charges us massive tariffs. Massive. You cannot even sell anything in India. They have agreed. By the way, they want to cut their tariffs way down now because somebody is finally exposing them for what they have done.” This statement highlights the progress made in the talks between the two countries and the willingness of India to address the concerns raised by the U.S.
India’s Commerce Minister Piyush Goyal recently visited Washington to discuss trade issues with American officials, including Commerce Secretary Howard Lutnick. In a statement to an Indian television network, Lutnick emphasized the importance of the “special relationship” between India and the U.S. and called for a comprehensive trade agreement that goes beyond individual products.
He also urged India to shift its defense equipment purchases away from Russia and towards the U.S. This move could help bridge India’s trade surplus with the U.S., which stood at over $40 billion last year. Lutnick also expressed the need for India to open its market to U.S. farm exports, a sector that has been a point of contention in previous trade negotiations.
However, Indian trade analysts have stated that while there is room for India to lower tariffs in several areas outside of agriculture, the country is not willing to compromise on its sensitive agricultural sector. Ajay Srivastava, founder of the Global Trade Research Initiative think tank in New Delhi, stated, “I think we can lower tariffs to zero level on most industrial goods, but agriculture we don’t want to touch. It is very sensitive. For us, that is not a trade issue but a livelihood issue, with more than 700 million farmers depending on it for their incomes.”
Other analysts also agree that agriculture could be a sticking point in the negotiations between India and the U.S. as the former is not willing to open its market to U.S. farm products. However, both countries are determined to find a middle ground and reach a mutually beneficial trade deal.
The U.S. is India’s largest export market, and the country does not want to jeopardize this relationship. Additionally, there is a growing sense of the U.S. being a valued strategic partner for India, and both countries are keen to avoid any trade tensions that could affect this partnership.
While India has been spared tariffs from the Trump administration so far, the threat of reciprocal tariffs looms over the negotiations. This could potentially affect Indian exports to the U.S. in areas such as pharmaceuticals, drugs, and auto components. Therefore, it is crucial for both countries to reach a trade deal that addresses the concerns of both parties and promotes a healthy and mutually beneficial trade relationship.
In conclusion, India and the U.S. are working towards a comprehensive trade agreement that will strengthen and deepen their trade relationship. Both countries are determined to address issues such as high tariffs and nontariff barriers and increase market access for each other’s products. While there may be some hurdles to overcome, the progress made in the talks so far is a positive sign, and both countries are committed to reaching a deal that benefits their economies and strengthens their strategic partnership.
