President Donald Trump, during his visit to the Middle East, announced that India has proposed to eliminate tariffs on goods imported from the United States. This statement was made in Doha, where Trump was attending a business event and revealed ongoing negotiations between India and the US to establish a new trade agreement. Delhi has not yet issued a response to these remarks, and additional details about the proposed deal remain undisclosed.
At the Doha event, Trump also shared that he advised Apple CEO Tim Cook against expanding manufacturing operations in India. He emphasized a preference for Apple to increase production within the United States. This comes in the context of Apple’s recent announcement to transition the production of iPhones from China to India, with Vietnam slated to become a significant production center for other Apple products like iPads and watches.
In April, President Trump imposed tariffs of up to 27% on Indian goods, prompting Delhi to expedite trade discussions to secure a deal before the expiration of a 90-day suspension of tariff increases, ending on July 9. The United States, which was recently India’s largest trade partner, engaged in bilateral trade valued at $190 billion. Despite efforts to reduce tariffs on select US products, the US still faces a $45 billion trade deficit with India, a situation Trump intends to address.
Trade expert Ajay Srivastava suggests that India might propose making 90% of US exports tariff-free immediately, adopting a ‘zero-for-zero’ strategy, which would exempt certain sectors like automobiles and agriculture. However, any agreement would require mutual and equal tariff eliminations. While both Trump and Indian Prime Minister Narendra Modi aim to boost trade to $500 billion, India’s readiness to make concessions in sensitive areas such as agriculture remains uncertain.
India has recently shown greater enthusiasm for trade agreements, evidenced by a recent pact with the UK that significantly reduces tariffs in protected sectors like whisky and automobiles. Additionally, India concluded a $100 billion free trade agreement with the European Free Trade Association after 16 years of discussions. Efforts to finalize a free trade agreement with the European Union are also underway this year.
