India is strategizing to address U.S. tariffs under Trump’s administration. Emphasis is on negotiating a trade deal to reach $500 billion in annual trade by 2030. Key points include the commitment to lowering tariffs in specific sectors and enhancing bilateral trade relations amidst concerns over escalating global trade tensions.
India is exploring strategies to address President Trump’s implementation of reciprocal tariffs. Trump suggested that many nations impose significantly higher tariffs on American goods, stating, “On average, the European Union, China, Brazil, India, Mexico, and Canada … charge us tremendously higher tariffs than we charge them.” He specifically highlighted India’s over 100% auto tariffs and China’s average being double that of the U.S.
The potential conflict arises as Prime Minister Modi and Trump discussed trade negotiations on February 13, aiming for a significant trade deal by the end of the year. Their goal is to reach $500 billion in annual bilateral trade by 2030. A joint statement indicated plans to craft a multi-sector Bilateral Trade Agreement (BTA) by fall 2025 to achieve these targets.
This BTA aims to enhance the bilateral trade involving goods and services by increasing market access and reducing tariff and non-tariff barriers. Both nations committed to bolstering trade relations, with the expectation that a mutually beneficial resolution regarding tariffs will be established.
Recent meetings are taking place, with Commerce Minister Piyush Goyal in Washington meeting with U.S. officials to discuss the deal. There is optimism that India may avoid the reciprocal tariffs imposed on February 2. India is responding to concerns regarding high tariffs, as Trump labeled it a “tariff king” since his inauguration on January 20.
In the 2025-26 Union budget, India proposed to lower tariffs on certain sectors like Bourbon whiskey, wines, and electric vehicles, signaling willingness to negotiate. The U.S. is also urging India to increase imports of American oil, gas, and military equipment to reduce the $45 billion trade deficit.
The U.S. remains India’s largest trading partner, with bilateral trade reaching $190 billion in 2023. Moreover, the U.S. was the third-largest source of FDI in India, with $4.99 billion flows recorded in the fiscal year 2023-24.
Trump’s tariff policies have raised global trade tensions, notably the recent 25% tariffs on Canada and Mexico and a hike to 20% for Chinese imports. These measures spark fears of an escalating trade war, putting India’s trade strategies under scrutiny.
In conclusion, India is proactively seeking to manage the implications of Trump’s reciprocal tariffs through ongoing trade negotiations. The Modi-Trump discussions aim for a substantial trade agreement targeting $500 billion in trade by 2030. As both nations work on reducing barriers and enhancing cooperation, India remains optimistic about addressing tariff challenges amidst increasing global trade tensions.
Original Source: m.economictimes.com
