India Seeks to Lower Tariffs in Pursuit of U.S. Trade Agreement
India aims to lower trade tariffs with the U.S. aimed at achieving a bilateral trade deal this year, targeting $500 billion in trade by 2030. Analysts suggest a conciliatory approach to avoid tensions, while challenges regarding agricultural tariffs could impede progress in negotiations.
India has announced its intent to lower trade barriers with the United States as part of negotiations for a bilateral trade agreement this year. Following a meeting between U.S. President Donald Trump and Indian Prime Minister Narendra Modi, both nations have set a goal of achieving $500 billion in bilateral trade by 2030. The External Affairs Ministry emphasized that the agreement seeks to enhance trade in goods and services, improve market access, reduce tariffs and non-tariff barriers, and strengthen supply chain integration between the two countries.
President Trump has criticized India for imposing high tariffs, claiming they are unfair and restrict U.S. market access. He highlighted India’s tariffs, particularly the up to 110% on car imports, expressing frustration over the difficulty in selling U.S. goods in India. “India charges us massive tariffs. Massive. You cannot even sell anything in India,” he stated during a press briefing.
In response to this pressure, analysts note that India is taking a conciliatory approach by engaging in talks to avoid escalating trade tensions. The country has previously lowered tariffs on specific imports that benefit U.S. businesses, including high-end motorcycles and bourbon. Trade analyst Biswajit Dhar remarked on India’s significant trade relationship with the U.S., noting, “The U.S. is, first of all, India’s largest export market, so we do not want to upset that.”
Indian exports to the U.S. were valued at over $87 billion last year, reinforcing the importance of maintaining a strong trading relationship. Despite being shielded from tariffs thus far, upcoming reciprocal tariffs could impact Indian exports across various sectors, including pharmaceuticals and auto components. Indian Commerce Minister Piyush Goyal recently visited Washington for discussions regarding these issues with U.S. officials.
Commerce Secretary Howard Lutnick urged India to reconsider its tariffs to reflect the “special relationship” with the U.S. He proposed a comprehensive approach to strengthen the economic ties between the two nations, emphasizing the need for broader negotiations rather than a piecemeal approach. Furthermore, he called for a shift in India’s defense procurement to favor U.S. suppliers, suggesting that increased defense purchases could mitigate India’s significant trade surplus with the U.S.
Lutnick also advocated for expanding U.S. agricultural exports to India, a proposal met with resistance due to concerns for domestic farmers. Trade analysts acknowledge the potential negotiations over agricultural imports present a significant challenge, with sentiments indicating that regions impacting livelihood should be delicately handled. Ajay Srivastava, a trade expert, remarked that while reducing tariffs on industrial goods could be feasible, agriculture remains a critical concern due to its implications on millions of farmers.
In summary, India is pursuing a bilateral trade deal with the United States, focusing on reducing tariffs and enhancing trade relations. While the objectives aim to increase bilateral trade significantly, the challenges regarding high agricultural tariffs may complicate negotiations. The initiatives reflect India’s strategic partnership with the U.S., as both nations seek to strengthen their economic bond while navigating sensitive issues related to domestic markets.
Original Source: www.voanews.com
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