New Delhi: In a cautious reaction to American President Donald Trump’s announcement on reciprocal tariffs on its trading partners, India on Friday said it is looking at deepening trade ties with the US including by reducing tariff and non-tariff barriers under a bilateral trade agreement.
In line with his “America First” policy, Trump this week announced reciprocal tariffs from April 2 on its partners and other nations that impose higher levies on imports from the US.
The US president’s policy on tariff has stoked fears of a global trade war with many countries already announcing counter-measures to deal with it.
In its first reaction, New Delhi indicated that it expects an amicable resolution to the issue.
During Prime Minister Narendra Modi’s visit to the US last month, both sides announced plans to negotiate a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA), External Affairs Ministry spokesperson Randhir Jaiswal said.
Commerce Minister Piyush Goyal was in the US and met his counterparts and the two governments are in the process of advancing discussions on a multi-sector bilateral trade pact, he said.
“Our objective through the BTA is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries,” Jaiswal added.
In his latest salvo, the US president while addressing a joint session of the Congress on Tuesday mentioned India alongside the European Union, China and Canada for charging higher tariffs on American products.
Trump said other countries have used tariffs against the US for decades, and now it’s “our turn” to start using them against those nations.
Modi held talks with Trump on February 13 talks in Washington DC.
In the meeting, the two sides agreed to negotiate a mega trade deal by the end of this year and set an ambitious target of USD 500 billion in annual trade by 2030 to narrow the trade deficit.
“Recognising that this level of ambition would require new, fair-trade terms, the leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025,” a joint statement on Modi-Trump talks said.
There is an expectation in New Delhi that it may escape the reciprocal tariffs being imposed by the Trump administration on February 2.
Since assuming office on January 20, Trump on multiple occasions criticised India for higher tariffs and even described the country as a “tariff king” and ‘tariff abuser’.
In its Union budget for 2025-26, India announced its decision to lower tariffs on Bourbon whiskey, wines, and Electronic Vehicle (EV) segments.
The decisions were seen as an attempt to send a signal to the Trump administration that New Delhi is open to bring down tariffs in specific sectors.
Washington is also pushing New Delhi to buy more American oil, gas and military platforms to bring down the trade deficit that stands at around USD 45 billion in India’s favour.
The US was the largest trading partner of India with overall bilateral trade in goods and services amounting to USD 190 billion for calendar year 2023.
In the financial year 2023-24, the US was the third largest source of foreign direct investment (FDI) into India with inflows of USD 4.99 billion accounting for almost per cent of total FDI equity inflows.
