Prime Minister Narendra Modi is all set to sit down with United States President Donald Trump on Thursday (February 13) at the White House for bilateral talks. The Indian leader landed in Washington late last night hoping to boost ties with the US and avoid Trump’s tariffs.
Since returning to the White House last month, the US president has imposed tariffs on friends and foes alike. For now, India has avoided Trump’s tariff hit list. But can that continue?
Let’s take a closer look.
India-US trade
The US is India’s largest trade partner. The two-way trade between the two countries reached a record high of $118 billion in 2023-24.
Last year, India shipped about $87 billion worth of goods and imported $42 billion. America’s trade deficit with India stood at $46 billion.
The US exports crude oil and related products, gems and stones, nuclear reactors and electrical and medical equipment to India.
The US’ top imports from India include pearls, semi-precious stones, pharmaceutical products and electrical equipment.
Trump’s tariff threat to India
India and the US enjoy close relations. But that has not stopped Trump from threatening to impose tariffs on Indian goods.
During his first term, Trump dubbed India the “tariff king.” In 2018, the US administration under the Republican applied tariffs on Indian steel and aluminium. New Delhi put retaliatory tariffs on US agricultural and industrial products.
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At the time, the Republican also slammed India for “unfair” import tariffs on Harley-Davidson motorcycles, leading to New Delhi reducing the tariff.
After years of trade tensions, India reached a resolution with the Biden administration to withdraw the retaliatory tariffs during Modi’s trip to Washington in 2023. On its part, the US made exclusions for Indian steel and aluminium.
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As Trump returns, he has called India a “very big abuser” of trade and threatened tariffs. However, New Delhi has avoided US tariffs so far, unlike China.
While Trump suspended his threat of 25 per cent tariffs on Mexico and Canada for a month, his 10 per cent tariff on Chinese goods came into effect last week. He has also restored a 25 per cent tariff on steel and aluminium, which is likely to hit India hard.
The US president is expected to sign an executive order on reciprocal tariffs before his bilateral talks with PM Modi on Thursday.
“I do believe it will come before the Prime Minister’s visit tomorrow, and I will let the President discuss the details on the reciprocal tariff front, but this is something he believes strongly in,” White House Press Secretary Caroline Leavitt told the media on Wednesday, alleging other nations had been “ripping off America”.
There are fears these reciprocal tariffs could affect India and kickstart a global trade war.
What’s India doing to avoid Trump’s tariffs?
India has been taking steps to steer clear of a tariff war with the US.
As part of the Union Budget, India reduced import duties on several goods imported from the US. This includes slashing import duty on some Harley-Davidson motorcycles, from 50 per cent to 40 per cent.
To placate Trump, New Delhi has also expressed willingness to buy more American oil. India could also offer to buy more US weapons.
Reuters reported citing unnamed Indian government officials that Modi’s “gift” for the US president could also include promises to purchase combat vehicles and jet engines.
As per The Hindu, India has been mulling slashing tariffs on certain US products like American pecans.
New Delhi is seeking deals on US agriculture exports to India and investment in nuclear energy, as well as tariff cuts in at least a dozen sectors, including electronics, medical and surgical equipment, and chemicals, reported Reuters.
Richard Rossow, head of the India programme at the Center for Strategic and International Studies, a Washington think tank, told the news agency that tariffs will be “front and centre” during Modi’s US visit. “It’s going to be a boxing match. I think India is willing to take a few hits, but there’s a limit,” he said.
PM Modi and Trump share a warm relationship but experts do not believe it would play a role in averting a possible tariff war with the US.
Speaking to Al Jazeera, Jon Danilowicz, a retired diplomat who served at the US Department of State, said, “A good equation can get India a quicker meeting or face time with Trump, not a deal.”
“It would be a mistake for India, or any country, to put too much emphasis on a personal relationship with Trump and neglect that there are many other inputs into the US foreign policy-making process, including the [US] Congress.”
As PM Modi meets Trump, he can point to recent measures by India to slash tariffs on US goods, analysts say.
Modi “has prepared for this, and he is seeking to preempt Trump’s anger,” Lisa Curtis, the National Security Council director on South Asia during Trump’s first term, told AFP.
India is also cooperating with the US on Trump’s top priority: deporting undocumented immigrants.
But is all this enough to get tariff waivers from Trump? Only time will tell.
