Aakhir Tak – In Shorts
- India’s tariff cuts are part of trade agreements, not Trump’s pressure.
- The US wants India to remove tariffs on almost all goods except agricultural products.
- Bilateral trade between India and the US has reached $118.2 billion.
- The goal is to increase bilateral trade to $500 billion by 2030.
- India is advancing trade talks with the United States.
Aakhir Tak – In Depth
India has recently reduced its tariffs, but this move is not due to pressure from US President Donald Trump. According to sources, this is part of India’s strategy to strengthen trade relations with developed countries through bilateral trade agreements. India has also made similar agreements with countries like Australia, the United Arab Emirates, Switzerland, and Norway. This strategic approach showcases India’s commitment to enhancing international trade collaborations.
Tariff Cuts: Part of Bilateral Agreements
India has previously reduced its tariffs under bilateral trade agreements with several countries. Negotiations for similar agreements with the European Union and the UK are also underway. While the Trump administration pressured India to reduce tariffs, India says these cuts are not due to Trump’s deadline but are part of ongoing trade negotiations.
US Demands
According to reports, the US has asked India to remove tariffs on nearly all goods except agricultural products. If India accepts this demand, it will have to give up trade protection. However, experts suggest that India needs to evaluate the overall benefit.
India-US Trade Relations
The United States is India’s largest trading partner, with bilateral trade reaching $118.2 billion in the last fiscal year. Both countries have agreed to negotiate a mutually beneficial multi-sector Bilateral Trade Agreement (BTA) by the end of this year, with the goal of reaching $500 billion in bilateral trade by 2030. To ensure the deal is successful, both countries must negotiate properly.
High-Level Talks
President Trump and Prime Minister Narendra Modi endorsed this during their meeting in Washington in February. Both leaders also agreed to appoint senior representatives to increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration. The agreement shows that the leaders of both countries have a shared interest.
Piyush Goyal’s Visit to the US
An Indian delegation led by Union Commerce Minister Piyush Goyal visited Washington from March 3 to 6. During this visit, the delegation held talks with US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. This shows that both countries are communicating and working together.
Previous Discussions
Even during the previous Trump administration, there were discussions about a limited trade agreement between Washington and New Delhi. However, for various reasons, the talks did not result in any outcome.
Company Preparations
Given the April 2 deadline, policymakers and businesses in India are working on ways to avoid the impact. Several reports suggest that the Centre is considering tariff cuts on key imports from the US. These preparations show how businesses are working hard.
Trump’s Tariff Threat
During his first joint address to the US Congress, President Trump promised to impose reciprocal tariffs from April 2 on most of Washington’s trading partners, including India, for “having trade policies that are unfair to Americans.”
He stated that India charges tariffs higher than 100 percent, China’s average tariff on our products is double what we charge them, and South Korea’s average tariff is four times higher.
Lutnick’s Statement
US Commerce Secretary Howard Lutnick said that India has some of the highest tariffs in the world, necessitating a reassessment of trade relations to determine the future course of ties between New Delhi and Washington. To ensure a more equal trade relationship, this needs to be reassessed.
Aakhir Tak – Key Takeaways to Remember
- India’s tariff reduction is not a result of external pressure but part of bilateral trade negotiations.
- The US has requested that India eliminate tariffs on all goods, with the exception of agricultural products.
- Bilateral trade between India and the US has already reached $118.2 billion.
- There is a strategic plan in place to increase bilateral trade to $500 billion by 2030.
- India and the US are actively engaged in trade talks aimed at facilitating mutual benefit.
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