US President Donald Trump has stated that the US is very close to reaching a new trade deal with India that will be equitable and reciprocal. He emphasized ongoing attempts to lower the stratospheric tariffs on Indian goods (primarily dictated, from India’s perspective, by its purchases of Russian oil) and expressed hope that economic ties between their two countries could strengthen mediation and foster security integration.
Trade Deal Progress
“We’re getting close,” Trump said at the swearing-in ceremony of Sergio Gor as the US envoy to India, adding that a trade agreement between the two countries would be “good for everybody. He described it as a “fair trade deal,” and said the new one is “substantially different” from any other we’ve ever entered into. The discussions are part of a wider plan for growing US energy exports and foreign investment in strategic industries. Trump lauded the Indian negotiators as “very good” and recognised that the bilateral relationship held strategic relevance in the Indo-Pacific.
Tariffs on India and Russian Oil
Trump responded to the question about high tariffs on imports from India, saying they were indeed high, but added that it was ultimately India’s fault because of the large quantity of Russian oil it had purchased at a time when the Ukraine crisis prompted US President Barack Obama to announce sanctions against Russia. But since India curtailed its Russian oil imports in a major way, the US hopes to lower those tariffs “at some point. He acknowledged that high tariffs had a significantly negative impact on trade ties and also stated that a reduction in these would ease negotiations currently underway.
Bilateral Trade Talks and Goals
Regarding high tariffs on imports from India, Trump stated that they were indeed very high and that it was India’s fault, not the US, as India had been taking advantage of the discounts following the European Union-Ukraine deal, which even US President Barack Obama had declared sanctions against Russia. However, with India having significantly cut its Russian oil purchases, the US “wants to reduce” those duties “over time. He admitted that the high tariffs were significantly impacting the trade relationship and that reducing them would help ongoing negotiations.
Strategic Importance of US-India Relations
Trump focused on India’s global stature as “one of the world’s oldest civilizations” and the largest democracy. He lauded Prime Minister Narendra Modi and said the US-India relationship is excellent. The US views India as a key economic and strategic ally, with its burgeoning middle class being vital for regional security and economic prosperity. The new US Envoy’s duty will be to bolster ties in economic, security, and strategic areas.
This new trade deal represents a significant step toward making US-India relations more equitable, enhancing trade, and fostering closer collaboration between the two countries. It reflects ongoing efforts to overcome past trade friction and build a closer, mutually beneficial partnership.