Modi, Trump set $500 billion annual trade target by 2030; India to buy more weapons, oil, gas from US

The meeting came hours after the US President announced a new reciprocal tariff policy for all the trading partners of the US including India.

New Delhi: Prime Minister Narendra Modi and President Donald Trump on Friday set an ambitious target to raise the annual two-way trade to the level of Rs 43,39,600 crore ($500 billion) by 2030 even as India showed interest in buying more weapons, oil and gas from the United States, apart from lowering tariffs to lessen the imbalance in bilateral commerce. 

The two sides agreed to restart the negotiation for a bilateral trade agreement and vowed to conclude at least the first tranche of it by the end of the year.

They also agreed to work out and sign this year a new 10-year Framework for the US-India Major Defence Partnership in the 21st Century. The Trump Administration also promised to clear the way for New Delhi to buy the F-35 stealth fighter jets manufactured by Lockheed Martin of the US, thus officially putting the advanced fifth-generation warplane in competition with Su-57s that Russia offered to make in India along with the transfer of technology. The two leaders announced the launch of the Autonomous Systems Industry Alliance for underwater domain awareness technologies – a move, which will help India acquire US systems to keep watch on the Chinese People’s Liberation Army Navy’s submarines in the Indian Ocean region.  

Modi and Trump agreed to “aggressively” address illegal immigration and human trafficking by taking “strong action against bad actors, criminal facilitators, and illegal immigration networks to promote mutual security for both countries”. The issue of illegal migration came under renewed focus after the Trump Administration started deploying military planes to deport Indian illegal migrants from the US.  

Modi met Trump just a few hours after the 47th American president, while announcing sweeping reciprocal tariffs on allies and adversaries alike from the Oval Office, once again criticised New Delhi for charging “tremendously high tariffs” on US exports to India.

Trump went on to complain about high tariffs imposed by New Delhi even at the joint news conference he and Modi addressed after the meeting at the White House. "Whatever India charges, we will charge them. We are being reciprocal with India,” he said but noted that Modi had recently announced “reductions” to India's “unfair, very strong tariffs” which had limited the access for US products to the market in India.

The joint statement issued after the meeting also noted India’s recent measures to lower tariffs on US products of interest in the areas of bourbon whiskey, motorcycles, ICT products and metals, as well as measures to enhance market access for US agricultural products, like alfalfa hay and duck meat, and medical devices. New Delhi also lauded the measures by Washington DC to enhance exports of India’s mangoes and pomegranates to the US. Both sides also pledged to collaborate to enhance bilateral trade by increasing U.S. exports of industrial goods to India and Indian exports of labour-intensive manufactured products to the US. The two sides will also work together to increase trade in agricultural goods.

“Today, we have set a target of more than doubling bilateral trade to $500 billion by 2030. Our teams will work on an early conclusion of a mutually beneficial trade agreement,” Modi said, adding: “We will strengthen the oil and gas trade to ensure India's energy security. Investment in energy infrastructure will also increase”.  

“Really, we want a certain level playing field,” said Trump, as he stressed “fairness and reciprocity” in bilateral commerce.

The India-US two-way trade in goods and services stood at $190.08 billion in 2023. The US had a trade deficit of $35.31 billion with India.

“They need it. And we have it,” Trump said, announcing that India would be “purchasing a lot of our oil and gas” from the US to narrow the trade imbalance.

The prime minister noted that the US had an important role in India’s defence preparedness. “As strategic and trusted partners, we are actively moving in the direction of joint development, joint production and transfer of technology,” he said.

“Starting this year, we will be increasing military sales to India by many billions of dollars,” said the US president. “We are also paving the way to ultimately provide India with F-35 stealth fighters,” he added.

India has contracted for more than $20 billion worth of US-origin defence articles since 2008, according to a report by the American Congress.

Modi and Trump on Friday also announced plans for New Delhi to procure from the US and jointly work out co-production arrangements for American "Javelin” Anti-Tank Guided Missiles and "Stryker” Infantry Combat Vehicles in India to rapidly meet India’s defence requirements. “They also expect the completion of procurement for six additional P-8I Maritime Patrol aircraft to enhance India’s maritime surveillance reach in the Indian Ocean Region following the agreement on sale terms,” according to the joint statement issued after the meeting.