The Indian government is optimistic about reaching a beneficial trade agreement with the United States. Prime Minister Narendra Modi and President Donald Trump have both indicated that they aim to finalize a deal by the fall of 2025. A senior government official mentioned that India’s exports differ from its imports from the US, suggesting mutual advantages in this arrangement.
The upcoming agreement could lead to a reduction in import duties on both sides. This move is expected to lessen the impact of existing tariffs. Additionally, addressing non-tariff barriers will be part of the negotiations. India plans to increase its imports of American oil, gas, and defense equipment to help balance the trade deficit, which has been a concern for Trump.
In recent weeks, the two nations have made progress by discussing the tariffs on certain American products, like Harley Davidson motorcycles, bourbon whiskey, and Californian wine. Import duties on these items have already seen some decreases, as noted in a joint statement from their meeting at the White House.
Looking ahead, there may also be cuts in duties on imported goods such as pecan nuts and various agricultural products. The joint statement highlighted the commitment from both sides to enhance bilateral trade by boosting US exports of industrial goods to India and encouraging Indian exports of labor-intensive products to the US. Agriculture is another focus area for cooperation.
Services are important for India, although it’s unclear if they will be included in the new trade agreement. Visa policies for Indian workers and professionals remain a crucial topic, but may be sensitive for Trump domestically. On the goods side, India wants to promote exports like textiles and leather, which currently face high tariffs in the US, sometimes reaching up to 40%.
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