With Trump win, India open to freeing up market access for U.S. firms, sources say
2024.11.07 06:27
By Shivangi Acharya and Krishn Kaushik
NEW DELHI (Reuters) – India is open to offering easier market access for U.S. firms if Washington reciprocates under President-elect Donald Trump, who has long called out New Delhi for its high tariffs, sources aware of the matter said.
Trump, who made a stunning political comeback four years after being voted out of the White House, recently labelled India a “very big abuser” of trade ties, vowing to raise tariffs on all imports by the United States during his campaign.
During his first term as president from 2017 to 2021, Trump warred with the South Asian nation over tariffs but shared a healthy relationship with Prime Minister Narendra Modi.
Closer to the end of his time in the White House, India and the United States agreed to negotiate a limited accord, in an effort to bridge their differences.
“India is open to lowering tariffs for entry of U.S. companies if that means better trade terms for Indian goods,” said one of the sources aware of the government’s thinking, who spoke on condition of anonymity.
The South Asian nation could lower import tariffs in sectors such as automobiles, the source added.
“We had a fairly good convergence during his first term in office,” said Harsh Vardhan Shringla, who was India’s ambassador to Washington during Trump’s first term.
“I think his second term will be even better because the two sides have developed a certain amount of mutual understanding and respect, especially at the level of the leaders.”
India had almost concluded a mini trade deal during Trump’s first term but for the COVID-19 pandemic, the retired diplomat added. “So, there is a scope to conclude a free trade agreement under Trump II.”
New Delhi is not too worried about the fate of its trade ties with Washington in Trump’s coming term, the sources said, with China largely front and centre for his tariff threats.
Trump’s approach to trade matters is transactional, which New Delhi believes helps in talks, another source, who is a senior government official, said days before Trump won the election.
India’s external affairs and trade ministries did not immediately reply to mails seeking comment.
STEADY PROGRESS
Modi, who flaunts warm ties with Trump, was of one the first world leaders to speak to him by telephone after his historic win. Despite criticising India on trade, Trump called Modi “fantastic” during his campaign.
The Indian leader also had good relations with Democratic presidents such as Barack Obama and Joe Biden.
The White House rolled out the red carpet for him last year, touting deals on defence and commerce as Washington increasingly views New Delhi as a counterweight to China’s growing regional influence.
Regardless of who occupies the White House, trade ties between the two nations have grown steadily over the last decade.
The United States is India’s top export destination, with goods and services exports of $120 billion in 2023.
