The two leaders also pledged to create opportunities for Indian and American companies to make greenfield investments in high-value industries in each other’s countries.
The joint statement came hours after Trump said the US will impose more reciprocal tariffs on nations including India in April, creating an uncertain environment. The US has already announced 25% additional tariffs on steel and aluminium.
‘Trade Scenario to be Interesting’
Ahead of Modi’s US visit, New Delhi had announced measures to cut duties on US products like bourbon whiskey, motorcycles, ICT products and metals. India on Thursday slashed tariffs on bourbon to 100% from 150%. Other imported liquor products will still be taxed at 150%. Against this backdrop, the proposed trade deal could help promote two-way commerce and provide a window for a limited trade deal on reciprocal tariffs, trade experts said.”This reciprocity will usher in a new era of bilateral trade relationships which go beyond the most-favoured nation approach. India will have to see how it excludes China from any benefits it offers other nations,” said Sachin Chaturvedi, director general of policy research institute Research and Information System for Developing Countries.
“The trade scenario will be interesting because India will lower tariffs and still face reciprocal tariffs in April besides the bilateral trade agreement to be negotiated before year end,” said a trade expert who requested not to be named.
Federation of Indian Export Organisations (FIEO) director general Ajay Sahai said India must strike a balance between protecting domestic industries and expanding exports to the US through targeted diplomacy.
Sanjay Nayar, president of industry body Assocham, said the proposed BTA would create new trade and investment opportunities.
In their joint statement, Modi and Trump committed to designate senior representatives to advance the negotiations for a trade deal and to ensure that the trade ties fully reflects the aspirations of the US-India Compact.
