Last month, India and US, following talks between Prime Minister Narendra Modi and Trump in Washington DC, announced that they would negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by the fall of 2025 and subsequently begun negotiations on the trade deal.
Commerce Minister Piyush Goyal was in the US from March 3 to 6 to hold talks on the trade deal with his American counterpart as well as the US Trade Representative and their teams. Trump’s announcement on Friday that India agreed to bring tariffs “way down” was largely viewed by New Delhi as premature.
“India charges us massive tariffs, you can’t even sell anything in India, it’s almost restrictive…By the way, they have agreed to cut their tariffs way down now because somebody is finally exposing them for what they have done,” the US president told reporters in the White House.
Foreign Secretary Vikram Misri, when asked at a media briefing on Saturday about Trump’s remarks on tariffs and the negotiations for the proposed trade deal, declined to provide details. “I will not get into that at this point of time because these are ongoing discussions, so it would not be right to get into it,” he said. At the same time, Misri pointed out that tariff liberalisation was the basis for several bilateral trade agreements finalised by India in recent years. “There are ongoing discussions with several other partners on these issues now, and I think the ongoing discussions should be seen in that context as well,” he said.
In line with his “America First” policy, Trump this week announced reciprocal tariffs from April 2 on its partners and other nations that impose higher levies on imports from the US. The US president’s tariff tussle has stoked fears of a global trade war with many countries already announcing counter-measures to deal with it.
The sources also pointed out how discussions had taken place between India and the US for a limited trade deal during the first Trump administration. For various reasons, it did not produce an outcome, they said.
India has not yet directly commented on Trump’s announcement on reciprocal tariffs but said it is looking at deepening trade ties with the US including by reducing tariff and non-tariff barriers under a bilateral trade agreement.
“Our objective through the BTA (Bilateral Trade Agreement) is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries,” external affairs ministry spokesperson Randhir Jaiswal said on Friday.
Since assuming office on January 20, Trump on multiple occasions criticised India for higher tariffs and even described the country as a “tariff king” and ‘tariff abuser’.
Washington is also pushing New Delhi to buy more American oil, gas and military platforms to bring down the trade deficit that stands at around USD 45 billion in India’s favour. The US was the largest trading partner of India with overall bilateral trade in goods and services amounting to USD 190 billion for calendar year 2023.
In the financial year 2023-24, the US was the third largest source of foreign direct investment (FDI) into India with inflows of USD 4.99 billion accounting for almost per cent of total FDI equity inflows.
