Amid Donald Trump's repeated statements threatening tariffs on imported goods into the US, the Indian Prime Minister's visit to the US may seek to address this issue. The Indian side may attempt to resolve tensions by expanding imports from the US.
From February 10-12, Modi visited Paris for the AI Action Summit, co-chairing discussions with world leaders and tech CEOs on collaborative, secure, and inclusive AI innovation for public benefit. After Paris, Modi will head to the US for a two-day visit to meet President Donald Trump.
According to a press release published on the website of the Press Information Bureau of India, Modi expressed eagerness to meet him again following Trump's recent election victory and inauguration. Modi fondly recalled their collaboration during Trump's first term to strengthen the India-US Comprehensive Global Strategic Partnership. The visit aims to build on past successes and expand cooperation in technology, trade, defense, energy, and supply chain resilience, benefiting both nations and contributing to a better future globally.
Reuters, citing sources, reported that Modi plans to introduce further tariff cuts before meeting with Trump this week, potentially enhancing American exports to India and averting a trade war. During his two-day visit to the US starting on February 12, Modi is also expected to suggest increased energy and defense imports. Alongside discussing tariffs, India is open to negotiating a potential mini-trade deal with Trump. Modi's visit seeks to prevent a situation similar to the US-China trade conflict.
According to Reuters, Kevin Hassett, Trump's top economic advisor, said that India's high tariffs on imports are a significant concern. In a CNBC interview, Hassett mentioned that if other countries lower their tariffs, the US would reciprocate. He noted that while Canada, Mexico, and Britain have tariffs similar to the US, Taiwan and India impose much higher rates.
The World Trade Organization reports that India ranks among the leading economies that impose higher tariffs on imported goods. In contrast, with the exception of economies such as Hong Kong, the US continues to be a major economy imposing the lowest tariffs.
Simple average of tariff by economy (%) | ||
Economy | Bound | Most favored nations applied |
Canada | 6.6 | 3.8 |
China | 10 | 7.5 |
EU | 4.9 | 5 |
India | 50.8 | 17 |
Japan | 4.1 | 3.7 |
Mexico | 36.2 | 6.8 |
South Korea | 17 | 13.4 |
US | 3.4 | 3.3 |
Source: WTO, July 2024