India, US Announce Plans To Negotiate First Phase Of Mega Trade Deal By This Year

(MENAFN- Kashmir Observer)
PM Narendra Modi with US President Donald Trump

Washington- In an ambitious move, India and the US agreed to conclude the first phase of a mutually beneficial ambitious trade pact by this year and set a target of USD 500 billion in annual bilateral trade by 2030 even as President Donald Trump asserted that Washington will not spare New Delhi from reciprocal tariffs.

Issues relating to trade and tariffs figured extensively in a meeting between Prime Minister Narendra Modi and Trump that took place hours after the US President announced a new reciprocal tariff policy for all the trading partners of the US.

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At a joint media briefing with Modi, Trump announced that he and Modi agreed on a deal that would facilitate India to import more US oil and gas to bring down Washington's trade deficit with New Delhi.

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The bilateral trade between India and the US was around USD 130 billion last year and the US trade deficit stands at around USD 45 billion at present.

The two leaders demonstrated mutual commitment to address bilateral trade barriers, according to officials.

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PM Modi had detailed discussions with President Trump on the concerns that were there on both sides regarding market access and the concerns arising from“other territories” with over capacities that take advantage of consumption in countries like India and the US, sources said.

The two leaders discussed ways and means to address these issues in an overall context and instructed the teams to work together on a mutually beneficial trade deal to address these concerns, they said.

“Whatever India charges, we will charge them,” Trump said on tariff, adding“We are being reciprocal with India.”

Modi and Trump resolved to deepen the US-India trade relationship to promote growth that ensures fairness, national security and job creation, a joint statement said.

“To this end, the leaders set a bold new goal for bilateral trade – 'Mission 500' – aiming to more than double total bilateral trade to USD 500 billion by 2030,” it said.

Recognising that this level of ambition would require new, fair-trade terms, the leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by the fall of 2025, it said.

To advance this innovative, wide-ranging BTA, the US and India will take an integrated approach to strengthen and deepen bilateral trade across the goods and services sector, and will work towards increasing market access, reducing tariff and non-tariff barriers, and deepening supply chain integration, according to the statement.

In his remarks to the press, Trump called import duties imposed by India on certain US products“very unfair” and“strong”.

The statement said the US welcomed India's recent measures to lower tariffs on US“products of interest” such as motorcycles, ICT (Information and Communication Technology) products and metals, as well as measures to enhance market access for US agricultural products, like duck meat, and medical devices.

India also expressed appreciation for Washington's measures to enhance exports of Indian mangoes and pomegranates to the US.

Both sides also pledged to collaborate to enhance bilateral trade by increasing US 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, the joint statement said.

Modi and Trump committed to drive opportunities for US and Indian companies to make greenfield investments in high-value industries in each other's countries.

In this regard, the leaders welcomed ongoing investments by Indian companies worth approximately USD 7.35 billion, such as those by Hindalco's Novelis in finished aluminium goods at their state-of-the-art facilities in Alabama and Kentucky; JSW in steel manufacturing operations at Texas and Ohio; Epsilon Advanced Materials in the manufacture of critical battery materials in North Carolina.

These investments support over 3,000 high-quality jobs for local families, according to the joint statement.

US to supply F–35 jets to India

US President Donald Trump announced after talks with Prime Minister Narendra Modi that India will buy more oil, gas and military hardware, including F-35 fighter jets, from America to bring down trade deficit but asserted that Washington will not spare New Delhi from reciprocal tariffs.

At his Oval Office in the White House on Thursday (Friday India time), Trump warmly welcomed Modi with a long handshake and a bear hug while describing the prime minister as a“great friend” for a long time and a“terrific” man.

The US president, at a joint media briefing with the Indian prime minister following the talks, said both sides are looking at striking a major trade deal soon while calling import duties imposed by India on certain US products as“very unfair” and“strong”.

“Whatever India charges, we will charge them,” Trump said, adding“We are being reciprocal with India.”

The Modi-Trump meeting took place hours after the US President announced a new reciprocal tariff policy for all the trading partners of the US in the latest in a series of such actions initiated by his administration.

In his remarks, Trump said he and PM Modi have reached an agreement that could potentially make the US the“number one supplier” of oil and gas to India, suggesting it to be part of measures to bring down the US trade deficit with India that stands at around USD 45 billion.

The US president also said that both sides have decided to expand the overall defence partnership.

“Starting this year, we will be increasing military sales to India by many billions of dollars,” Trump said.

“We are also paving the way to ultimately provide India with F-35 stealth fighters,” he added. The F35 jets are known as the most lethal, survivable and connected fighter aircraft in the world.

Trump also announced that India and the US will be working together like“never before” to confront the threat of radical Islamic terror across the world.

“I am pleased to announce that my administration has approved the extradition of one of the very evil people of the world,” he said, referring to the extradition of 26/11 Mumbai attack plotter Tahawwur Rana to India.

Rana, currently detained at a metropolitan detention centre in Los Angeles, is known to be associated with Pakistani-American terrorist David Coleman Headley, one of the main conspirators of the terror attack.

“He is going to be going back to India to face justice,” Trump said.“We're giving him back to India immediately” and more such extraditions could follow as we have quite a few requests (from New Delhi),” he added.

The US president also noted positive momentum in India-US cooperation in the civil-nuclear energy sector.

“In the groundbreaking development for the US nuclear industry, India is also reforming laws to welcome US nuclear technology to the Indian market,” he said.

In his remarks, Prime Minister Modi said cooperation between India and the US can shape a better world.

A defence cooperation framework will be prepared for next decade, he said.

“One thing that I deeply appreciate, and I learn from President Trump, is that he keeps the national interest (of the US) supreme. Like him, I also keep the national interest of India at the top of everything else,” Modi said.

To a question on whether the issue relating to business tycoon Gautam Adani figured in the talks, Modi said:“India is a democracy and our culture is 'Vasudhaiva Kutumbakam'. We consider the whole world as one family. I believe every Indian is mine.”

Modi said such individual matters are not discussed in talks between two leaders.“Two prominent leaders of two countries never discuss such individual issues,” he said.

On ties between India and China following the eastern Ladakh border row, Trump described the“skirmishes” as“vicious”.

“I do see the skirmishes on the border which are quite vicious... If I could be of help,” he said.

The US president said he wished China, India, Russia and the US - all could get along well.

Prime Minister Modi and President Trump also answered questions on the Russia-Ukraine conflict.

“I support Donald Trump's efforts towards finding a possible solution to end the war. The world somehow feels India has been neutral during the war. But I would like to reiterate that India has not been neutral. In fact, India has been on the side of peace,” Modi said.

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