- Статьи
- World
- Elephant in the china shop: The United States has obtained a reduction in duties from India
Elephant in the china shop: The United States has obtained a reduction in duties from India
The United States has obtained from India a reduction in duties on some American goods. At the same time, President Donald Trump did not put much pressure on New Delhi, which is considered an important ally of Washington in the Indo-Pacific region. For the American leader, in the context of containing China, India has now become more important than Europe. Details can be found in the Izvestia article.
Avoid confrontation with Trump
"India charges us huge duties, just huge. You can't sell anything in India. <...> But now they want to significantly reduce duties," said US President Donald Trump.
According to him, American companies operate "very little" in India due to the restrictions in force in the country. India is a huge but rather closed market. The Hindustan Times reported that the country agrees to these measures to prevent a trade war with the United States. We are talking about reducing duties, including the introduction of a zero tariff on certain types of agricultural products. In addition, India has signaled its readiness to reduce imports of automobiles, chemicals, electronics, pharmaceuticals and medical devices as part of bilateral trade with the United States.
Earlier, the US president announced plans to introduce new retaliatory duties on imported goods from April 2. He believes that, on average, EU countries, China, Brazil, India, Mexico and Canada charge the United States much higher taxes than the United States charges them. "India charges us car tariffs above 100%," Trump cited an example.
Reducing duties on car imports would be beneficial to entrepreneur and head of the US Department of Public Administration Efficiency, Ilon Musk, who would like to enter the Indian market with Tesla. The first showroom will be opened in Mumbai — the premises were rented for five years for $ 2.5 million.
Reach an agreement
Earlier, U.S. Commerce Secretary Howard Lutnik said that Indian-American relations would be "rethought based on the principle of reciprocity." He stressed that India has some of the highest duties in the world. According to Lutnik, the American leader seeks to equalize the level of duties in Washington's bilateral trade with other countries.
Against the background of such statements, the recent visit of Indian Minister of Trade and Industry Piyush Goyal is interesting. According to him, Washington and New Delhi plan to hold talks on a bilateral trade agreement. For his part, Lutnik advocated a "macroeconomic, major trade agreement" with India, rather than a "product-by-product" deal.
The two leaders agreed on their intentions to double the volume of bilateral trade to $500 billion by 2030 during the visit of Indian Prime Minister Narendra Modi to the White House. In addition, they decided to implement the "first tranche of a mutually beneficial multisectoral bilateral trade agreement" by the fall of 2025.
According to The Economic Times, in 2023, the volume of bilateral trade in goods and services between the United States and India amounted to $190.08 billion. In the same year, exports of goods from India to the United States reached $83.77 billion, while imports reached $40.12 billion, resulting in a trade deficit of $43.65 billion in favor of India.
As the newspaper notes, from 2021 to 2024, Washington was New Delhi's largest trading partner. The United States is one of the few countries with which India has a positive trade balance.
Two possible options
There are two options for interaction between the countries, Alexey Kupriyanov, head of the South Asia and Indian Ocean Region Group at the IMEMO RAS Center for Asia-Pacific Studies, explained in an interview with Izvestia.
— The first track is political. If Trump seriously quarrels with China, for example, to arrange a confrontation with it, then India will be useful to him as a valuable partner who has a territorial dispute with China, the political scientist believes. According to him, this is the hereditary course of the American administration.
The other track is economic, and it is likely to be more important for Trump. The United States is one of the two major economies with which New Delhi has a trade surplus, while Indian trade is in short supply with all the others, the expert noted.
He stressed that Indians import much more than they export.
— At the same time, the Indian leadership always protects its own market. Since the 90s, the Americans have been trying to "push" the Indians to open the market. For the United States, this means one and a half billion people who will actively buy American goods," the expert believes.
The analyst added that if import duties, which New Delhi still maintains, are reduced, this will become "a strong driver of the development of the American economy."
— But the Indian leadership understands that if it does this, it will kill several sectors of its industry at once. For a number of reasons, such a scenario is impossible. This means the loss of strategic autonomy and the loss of the backbone of industry," the indologist said.
Kupriyanov clarified that despite the fact that the industry is not competitive in the global market, the very fact that India has it allows the local economy to develop quite rapidly.
— In addition, India is not particularly dependent on external supplies of basic basic goods. Instead, the Indians propose to actively attract foreign direct investment and technology so that Americans do not produce at home, but build factories in India itself," the political scientist explained.
According to him, it is obvious that Trump does not need to take out production, he needs to keep it at home. The Indian leadership understands what the US president wants and is "trying to make do with little blood in this situation," the expert said.
Therefore, in his opinion, the Indians have reduced duties on expensive cars in the latest budget. And we are ready to review import duties on more than 30 items, including solar panels.
"New Delhi is trying to cross a narrow bridge without killing its economy, on the one hand, and on the other, by giving Trump concessions that are critically important to him," the indologist believes.
Conflicting relationships
Scientific Director of the Russian Council on International Affairs (RIAC) Andrey Kortunov, in a conversation with Izvestia, noted that there is some contradiction in the approaches of the current American administration towards India.
— It lies in the fact that, on the one hand, India is a valuable partner, a counterweight to China, the largest democracy in the world. In addition, there are very good, I would say, warm relations between Trump and Modi," said the American.
At the same time, the political scientist stressed that Trump treats his partners and even allies quite harshly. India is no exception.
— Apparently, the tariff increase strategy also applies to New Delhi. Obviously, there will be tough bargaining regarding various aspects of cooperation between the two countries," the expert believes.
In his opinion, this will affect those areas in which the United States has an advantage.
Переведено сервисом «Яндекс Переводчик»
