India and the United States have agreed to work toward more than doubling their bilateral trade to $500 billion by 2030. During a meeting in Washington, Indian Prime Minister Narendra Modi and U.S. President Donald Trump emphasized their commitment to strengthening trade ties. Both countries plan to finalize a mutually beneficial trade agreement soon.
The U.S. acknowledged India’s recent efforts to reduce tariffs on certain imports. However, the American side also expressed concerns about trade imbalances and plans to introduce reciprocal tariffs, ensuring that U.S. tariffs match those imposed by India. While India's average tariff on most-favored-nation (MFN) countries is 17%, the U.S. applies a much lower rate of 3.3%. In 2024, total trade between the two countries was estimated at $129 billion, with India holding a $45.7 billion surplus.
Defense cooperation is also set to expand, with the U.S. planning to increase military sales to India, including F-35 fighter jets. India, which imports the most defense equipment globally, is expected to shift more of its defense purchases from Russia to the U.S. Additionally, both nations will collaborate on artificial intelligence, semiconductors, and the development of strategic mineral supply chains.
Experts believe that reaching the $500 billion trade goal is possible, especially if India boosts its imports of liquefied natural gas from the U.S. However, some challenges remain, such as concerns over illegal immigration and India’s long-standing defense ties with Russia, which could continue to be a point of tension in bilateral relations.
Meanwhile, the U.S. is evaluating appropriate tariff levels before implementing new reciprocal tariffs. Similar measures have already been applied to other countries, including China, Canada, and Mexico. Although the recent meeting highlighted positive steps, underlying issues still pose challenges to the U.S.-India partnership.
Source: UNB and other agencies
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