14/02/2025 16:18:51
The United States and India have set a target to more than double bilateral trade to $500 billion by 2030, Indian Prime Minister Narendra Modi announced during a joint press conference with US President Donald Trump in Washington on Thursday. The commitment comes as Trump moves ahead with plans to impose “reciprocal tariffs” on foreign imports, including those from India.
Speaking at the conclusion of their meeting, Modi said the two nations would work toward a mutually beneficial trade agreement, with negotiations set to begin soon. Trump acknowledged India’s recent reduction in tariffs on select US goods and said he hoped discussions would resolve trade disparities.
Hours before the meeting, Trump signed a presidential memorandum outlining plans to impose tariffs on nations that maintain higher duties on US goods. Under this policy, the US will match the tariff rates that India and other countries impose on American exports.
India’s simple average tariff on most-favoured-nation (MFN) countries stands at 17 percent, compared with the US rate of 3.3 percent. According to the Office of the US Trade Representative, total goods trade between the two nations reached $129 billion in 2024, with India running a $45.7 billion surplus.
As part of efforts to balance the trade relationship, Trump confirmed that the US will increase military sales to India, starting this year, and ultimately supply the country with F-35 fighter jets. India is the world’s largest importer of defence equipment and has traditionally relied on Russian suppliers.
Modi said India and the US would also strengthen cooperation on artificial intelligence, semiconductors, and critical minerals. India is expected to expand its imports of liquefied natural gas and crude oil from the US, with Trump stating that India would “become one of our biggest energy buyers.”
Despite the upbeat tone of the meeting, tensions remain over Trump’s tariff policy. “We are, right now, a reciprocal nation… We’re going to have whatever India charges, we’re charging them,” Trump said, adding that the policy was “a fair way” to address trade imbalances. However, the new tariffs will not take effect immediately, as officials assess the appropriate rates for each country.
Trump has already imposed tariffs on China, Canada, and Mexico, along with global duties on steel and aluminium. His administration recently removed exemptions from its 2018 metal tariffs, and additional levies on US trading partners could take effect as early as April.
Immigration was also a point of discussion. Trump announced that the US would extradite a man accused of involvement in the 2008 Mumbai terror attacks, a move welcomed by Modi. Meanwhile, India has pledged to accept repatriations of undocumented Indian nationals in the US. Last week, a US military plane deported 104 Indian nationals accused of illegal immigration, with another flight expected to follow.
The meeting highlighted India’s growing importance to US strategic and economic interests, though challenges remain. While Modi seeks to deepen ties and avoid punitive tariffs, Trump has made clear that his administration is prioritising US manufacturing and fairer trade agreements.
Daniel Balazs, a research fellow at the S. Rajaratnam School of International Studies, noted that despite closer cooperation, US-India relations still face long-term hurdles. “India’s close ties with Russia and concerns over illegal immigration are unlikely to disappear anytime soon,” he said.