Modi In US: The United States and India have decided to once again give it a shot at having a free trade agreement between both the countries – an unfinished agenda from President Donald Trump’s first tenure when Washington and New Delhi nearly signed a pact in order to gain enhanced access in each other’s markets for their goods and services, ABP Live learnt.
The plan to restart the negotiations for a trade deal was firmed up during Prime Minister Narendra Modi’s two-day visit to the United States where he held his first bilateral meeting with President Trump after he came back to the White House winning a landslide victory in the US Presidential elections last November.
“On tariff and trade, PM had detailed discussions with President Trump on the concerns that were there on both sides regarding market access and the concerns arising from other territories with over capacities that take advantage of consumption in countries like India and the US,” an official source told ABP Live hinting at the fact that both sides are seeking to have the trade deal eyeing China’s economic rise.
The official also said, “They discussed ways and means to address these issues in an overall context. They instructed the teams to work together to work on a mutually beneficial trade deal to address these concerns and conclude such an agreement before the fall this year.”
This comes at a time when President Trump has come down heavily on U.S.’ partner countries with which it is having high trade deficits. The trade deficit between the U.S. and India has reached nearly $50 billion.
In a joint press conference with President Trump, PM Modi said, “Today we have set a target to increase our bilateral trade to more than double, reaching $500 billion by 2030. Our teams will work on finalising very soon a mutually beneficial trade agreement.”
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US To Impose Reciprocal Tariff On Indian Goods
Just a few hours before Trump was to meet Modi for their first bilateral meeting, Washington said it will be imposing reciprocal trade tariffs on Indian goods that are being imported by the U.S. under his “fair and reciprocal” trade plan.
“The U.S. average applied Most Favored Nation (MFN) tariff on agricultural goods is 5%. But India’s average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while we only charge a 2.4% tariff on Indian motorcycles,” said a White House Fact Sheet on ‘Fair and Reciprocal Plan’ on Trade statement.
The White House said, “Lack of reciprocity is one source of America’s large and persistent annual trade deficit in goods: closed markets abroad reduce U.S. exports and open markets at home result in significant imports, both of which undercut American competitiveness.”
According to the White House, in 2024 alone the United States had a trade deficit in goods exceeding $1 trillion.
“Thanks to the proliferation of non-reciprocal barriers in just the last few years, the U.S. now runs a trade deficit in agriculture, worth around $40 billion in 2024,” said the White House.
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