India agrees with US on early trade deal

New Delhi: Even as President Donald Trump’s ‘reciprocal tariffs’ on the imports of the United States triggered concerns among the exporters of India, Prime Minister Narendra Modi’s government in New Delhi on Monday signalled that it was willing to speed up the negotiations with Washington DC for the proposed bilateral trade deal.

External Affairs Minister S Jaishankar and the US Secretary of State, Marco Rubio, spoke over the phone and discussed the bilateral trade relations.

“Agreed on the importance of the early conclusion of the Bilateral Trade Agreement. Look forward to remaining in touch,” Jaishankar posted on X after the phone call with Rubio.

Trump on April 2 issued his Executive Order on Reciprocal Tariffs, imposing additional ad-valorem duties ranging from 10 per cent to 50 per cent on imports from all trading partners. The baseline duty of 10 per cent came into effect from April 5, and the remaining country-specific additional ad-valorem duty will be effective from April 9. The executive order imposed an additional duty of 27 per cent on India’s exports to the US.

The Global Trade Research Initiative (GTRI), a think-tank based in New Delhi, estimated that India’s exports to the US might decline by 6.41 per cent – or about $5.76 billion – in 2025 as a result of the tariff tirade of Trump.

New Delhi, however, avoided getting into a war of words with Trump’s administration in Washington, DC, unlike Canada and China.

The Ministry of Commerce in New Delhi stated that it was assessing the implications of the reciprocal tariffs for India’s exports to India. The ministry is also studying the opportunities that may arise due to “this new development in the US trade policy”.

Trump repeatedly criticised India for imposing high tariffs on US exports over the past several weeks, just as he had been doing in his first term in the White House.

The 47th US president hosted Prime Minister Narendra Modi at the White House on February 13, and the two leaders agreed to negotiate a trade agreement. They set the target to conclude negotiations, at least for the first part of the agreement, by fall 2025. Trump, however, continued his rants on India’s high tariffs on exports from the US.

The US goods imports from India totalled $87.4 billion in 2024, 4.4 per cent or $3.7 billion more than in 2023. India imported goods worth $41.75 billion from the US in 2024. India was the destination of 2.02 per cent of exports in 2024. The US goods trade deficit with India was $45.6 billion in 2024, an increase of $2.3 billion (5.3 per cent) over 2023.

New Delhi purportedly conveyed to Washington, DC that it was willing to consider slashing tariffs on 55 per cent of the US exports to India, worth about $23 billion.

“Exchanged perspectives on the Indo-Pacific, the Indian Sub-continent, Europe, Middle East/West Asia and the Caribbean,” Jaishankar posted after his phone call with Rubio.

The Modi Government in New Delhi, in its 2025-26 annual budget, announced a reduction of the customs duty rates on several items imported to India, following up on the similar announcement in the July 2024 budget.