India and the US are targeting to double bilateral trade to USD 500 billion by 2030, with initial negotiations for a Bilateral Trade Agreement starting by 2025. President Trump announced tariff reductions from India, while US Commerce Secretary Lutnick calls for a comprehensive trade strategy. 2023 figures show a favorable trade surplus for India, emphasizing the US’s vital role as India’s largest trading partner.
The recent visit of Indian Prime Minister Narendra Modi to Washington culminated in a commitment from both India and the US to enhance bilateral trade to USD 500 billion by 2030. The two nations will also initiate discussions for a multi-sector Bilateral Trade Agreement (BTA), with aims to finalize the first phase of negotiations by fall 2025.
US President Donald Trump emphasized that India would significantly reduce its tariffs, addressing past assertions regarding high tariffs that have hindered US exports. Concurrently, Commerce Secretary Lutnick has advocated for a comprehensive trade agreement, rather than piecemeal negotiations on individual products.
In 2023, the US-India trade reached USD 190.08 billion, including USD 123.89 billion in goods and USD 66.19 billion in services. Notably, India exported goods worth USD 83.77 billion to the US while importing USD 40.12 billion, resulting in an advantageous trade gap of USD 43.65 billion for India.
Within the services sector, India exported USD 36.33 billion to the US against imports of USD 29.86 billion, creating a smaller trade surplus of USD 6.47 billion. Throughout the 2021-2024 period, America ranked as India’s largest trading partner, with a notable trade surplus favoring India.
During the 2023-24 period, bilateral trade between the US and India was recorded at USD 119.71 billion, driven by exports of USD 77.51 billion and imports valued at USD 42.19 billion, achieving a trade surplus of USD 35.31 billion for India. Additionally, India attracted USD 67.8 billion in foreign direct investments from the US from April 2000 to September 2024.
To summarize, the India-US trade partnership is set for substantial expansion, with a target of USD 500 billion in trade by 2030 and ongoing negotiations for a comprehensive Bilateral Trade Agreement. Tariff reductions and major agreements on agricultural access are pivotal to these discussions. The current trade dynamics indicate a strong surplus in favor of India, reinforcing its position as a key partner for the US.
Original Source: m.economictimes.com
