India and U.S. Strengthen Trade Relations: A Strategic Commitment to Growth

During Prime Minister Modi’s visit to Washington, India and the U.S. committed to boosting bilateral trade to USD 500 billion by 2030 and to initiating a Bilateral Trade Agreement by 2025. President Trump announced India’s willingness to reduce tariffs, while trade statistics reveal a significant surplus for India against the U.S.

The recent visit of Prime Minister Narendra Modi to Washington resulted in a strong commitment from both India and the United States to more than double their bilateral trade to USD 500 billion by 2030. Additionally, the nations plan to launch negotiations on a multi-sector Bilateral Trade Agreement (BTA) by the fall of 2025.

During this visit, President Donald Trump noted that India has agreed to significantly reduce its tariffs, addressing his concerns about high tariffs that hinder U.S. product sales in India. Commerce Secretary Lutnick advocated for a comprehensive trade agreement rather than a piecemeal, product-by-product approach.

In 2023, the total bilateral trade between the U.S. and India reached USD 190.08 billion, with India exporting USD 83.77 billion and importing USD 40.12 billion, resulting in a trade surplus of USD 43.65 billion in favor of India. Furthermore, India’s services exports amounted to USD 36.33 billion, while imports stood at USD 29.86 billion, yielding a trade surplus of USD 6.47 billion.

From 2021 to 2024, the U.S. consistently emerged as India’s largest trading partner, maintaining a favorable trading relationship. In the fiscal year 2023-24, the total bilateral trade in goods was USD 119.71 billion, showcasing India’s exports worth USD 77.51 billion against imports totaling USD 42.19 billion, establishing a trade surplus of USD 35.31 billion.

Additionally, India has attracted USD 67.8 billion in foreign direct investment from the United States between April 2000 and September 2024, further solidifying the economic ties between the two nations.

In summary, the recent U.S.-India trade discussions mark a significant step towards expanding bilateral commerce, with a targeted goal of USD 500 billion by 2030 and negotiations for a comprehensive trade agreement. The mutual trade dynamics illustrate India’s prominent trading role and its continued favorable trade surplus with the United States. The economic relationship is expected to grow, supported by substantial foreign direct investment from the U.S.

Original Source: m.economictimes.com