India-US Trade Deal Soon! Trump Hints At Favourable Tariff Agreement As He Calls PM Modi His 'Great Friend'

New Delhi: India and US may soon be entering into a trade deal, further cementing their already strong and strategic partnership and friendship between the US President and PM Modi. 

President Trump has hinted at a favourable tariff deal with India, in his latest address to media, as he called PM Modi a ‘great Prime Minister and friend'.

Also Read: Impact Of US Tariffs On India: Mobile Exports May Be Hit, Auto Component Prices May Go Up - PwC Report

India-US Trade Deal Soon? Trump Hints at Favourable Tariff Agreement

Ahead of the likely imposition of Trump's reciprocal tariffs from next week, Trump's latest address to the media hint at a favourable tariff deal between US and India. While interacting with the media at the swearing-in ceremony of the US Attorney for New Jersey, Trump also commented on the talks between India and US over tariffs.

US President Trump said, “India is one of the highest tariffing nations in the world... They're very smart." He further said, “I think it's going to work out very well between India and our country.”

Trump Is All Praises for PM Modi, Calls Him ‘Great Prime Minister and Friend’

The strong relations between India and the United States are also because of the wonderful relationship that US President Donald Trump and Prime Minister Narendra Modi share. Once again, Trump has praised PM Modi, calling him a great Prime Minister and friend.

In his words, "He (PM Modi) is a very smart man and a great friend of mine. And I want to say you have a great prime minister.”

Trump's Tariff Imposition and Impact on India

This week, Trump unveiled a significant policy decision from the Oval Office, announcing a 25 percent tariff on all imported vehicles entering the United States. He called the move "very exciting" for domestic manufacturing. Set to take effect on April 2, the tariffs will affect nearly half of all vehicles sold in the US, including American brands produced abroad. The broad initiative is designed to encourage car manufacturers to build more production plants within the United States.

Previously, Trump had repeatedly criticized India, claiming that "they have the highest tariffs" and calling it "a difficult place to do business." In February, the US President announced plans to soon impose reciprocal tariffs on countries like India and China, stating that the United States would match the tariffs these nations impose on American products. 

Trump said, "We will soon apply reciprocal tariffs – they charge us, and we charge them. Whatever a country, like India or China, imposes, we want to be fair; that's the idea behind reciprocal tariffs." He added, "We've never done this before, but we were preparing to implement it until Covid came along." Trump also specifically criticized India's high tariffs on automobile imports, stating, "India charges us more than 100 percent in auto tariffs."

How India is Trying to Avoid Retaliatory Tariffs from US

India is prepared to lower tariffs on more than 50% of American imports worth $23 billion as part of the initial phase of a trade agreement under negotiation between the two nations, according to two government sources who spoke with Reuters. This significant tariff reduction is aimed at avoiding retaliatory reciprocal tariffs. India seeks to mitigate the impact of global reciprocal tariffs that US President Donald Trump plans to implement starting April 2, which has created market instability and raised concerns among policymakers worldwide.

During a series of meetings in New Delhi with Brendan Lynch, the US trade representative for South and Central Asia, India agreed to reduce tariffs on products like bourbon whiskey and agricultural goods including almonds, walnuts, cranberries, pistachios, and lentils, one source familiar with the talks revealed. Last month, India cut the tariff on bourbon whiskey from 150% to 100%. Import duties on agricultural products such as cranberries, almonds, and walnuts range from 30% to 100%, while lentils are taxed at around 10%.