Context:
Prime Minister Narendra Modi’s bilateral meetings with U.S. President Donald Trump this week are expected to focus on tariff negotiations, with India considering further import duty reductions on U.S. goods like pecan nuts to ease trade tensions.
Key Highlights:
India’s Tariff Concessions on U.S. Agricultural Imports
- India has already cut import duty on U.S. almonds and is weighing further reductions on pecan nuts.
- The import duty on pecan nuts was reduced from 100% to 30% in early 2023 and is likely to go down further.
- This is aimed at countering the concerns over India’s trade policies by the U.S. and softening Trump’s stance on tariffs.
India’s Case for Low Tariffs on U.S. Industrial Products
- Indian officials will present a fact sheet that import duties on major U.S. industrial exports to India are already low or zero.
- The government hopes this will counter Trump’s claims that India is a tariff abuser.
Possible U.S. Concessions for India
- India is also seeking to have its GSP benefits restored, which Trump had canceled in 2019.
- Officials claim that a meeting between Modi and Trump would eventually ease or suspend the U.S. trade measures felt to be detrimental against India.
U.S. Strategy: Tariffs as Negotiation Tool
- Trump has used tariffs as a bargaining chip before in trade agreements with Canada and Mexico.
- US India Strategic Partnership Forum (USISPF) President Mukesh Aghi believes this ‘art of the deal‘ approach by Trump can end with a win win trade agreement for the two nations also.
Further Trade & Defence Talks
- The President wishes to hammer in a Free Trade Agreement with India.
- The U.S. will also ask for greater purchases of Indian equipment and American exports of energy products.
