New Delhi, February 10, 2025: Ahead of Prime Minister Narendra Modi’s two-day visit to the United States on February 12-13, India is considering additional tariff reductions to encourage American exports and prevent a potential trade war.
The expected reductions in tariffs would affect at least a dozen sectors such as electronics, surgical and medical equipment, and chemicals. It would cover items usually imported from the US, like dish antennas and wood pulp, which the country can primarily source from the US. This, according to authorities, helps achieve the redundancy of India’s domestic production and economic strategy goals.
One of Modi’s goals during his encounter with Donald Trump has been to halt the onset of a trade war situation akin to what is currently happening between America and China. The Chinese counter retaliated after the US placed a 10% tariff on them claiming that American energy exports and goods would have to suffer the same fate. Indian officials are trying to render such trade dependency relations in favorable terms to both nations.
There have not been any individual confirmations from India’s trade ministry, foreign affairs ministry, or the Indian Prime Minister’s office on the anticipated allowance reductions in tariffs.
Strategic Importance of Modi-Trump Talks
The Modi – Trump meeting holds significance for multiple reasons – mainly causing America to lower its reliance on reciprocal tariffs to reshape trade across the globe. Trade, defense cooperation, and technology collaboration are expected to dominate the discussions, although detailed negotiations may be slated for tariffs at a later date.
Trump has previously criticized India’s trade practices, calling the country a “very big abuser” in global trade. He has emphasized that India must purchase more US-made security equipment for a fair bilateral trade relationship. Despite this tough stance, Trump has often praised Modi, which could create a diplomatic opening for India to negotiate favorable trade terms.
India and the US are vital trading partners, with bilateral trade exceeding $118 billion in 2023-24. The upcoming talks between the two leaders are expected to play a crucial role in shaping the future trajectory of Indo-US economic relations.
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