New Delhi and Washington have set an ambitious goal to more than double their bilateral trade to $500 billion by 2030, Indian Prime Minister Narendra Modi announced during a joint press conference with US President Donald Trump on Thursday.
The statement followed discussions between the two leaders in Washington, where they addressed trade disparities and ongoing tariff concerns.
Modi emphasized the commitment of both nations to finalizing a trade agreement that would be mutually beneficial. "Our teams will work on concluding very soon, a mutually beneficial trade agreement," he said.
The Indian leader also highlighted cooperation in artificial intelligence, semiconductors, and supply chains for strategic minerals as key areas for economic collaboration.
According to Reuters, Trump acknowledged India's recent tariff reductions on certain US imports but stressed the need to address remaining imbalances. He reiterated his stance on enforcing "reciprocal tariffs" to ensure fairness in trade relations.
"We are, right now, a reciprocal nation... We're going to have whatever India charges, we're charging them. Whatever another country charges, we're charging them. So it's called reciprocal, which I think is a very fair way," Trump stated.
The announcement came just hours after Trump signed a presidential memorandum outlining his plan to impose equal tariff rates on foreign nations, including India. The move is part of his broader effort to reduce the US trade deficit with major partners.
US-India Trade Hits $129 Billion, With India Holding $45.7 Billion Surplus
Currently, India's simple average tariff on most-favored-nation (MFN) status countries stands at 17%, whereas the US applies an average tariff of 3.3%.
In 2024, the US recorded total goods trade with India at approximately $129 billion, with India maintaining a $45.7 billion trade surplus, according to the Office of the US Trade Representative, CNBC said.
Apart from trade, defense cooperation featured prominently in the discussions. Trump confirmed that the US would increase its military sales to India, with plans to provide F-35 fighter jets.
The move aligns with efforts to enhance security ties and counter regional threats. "The threat of radical Islamic terrorism" was cited as a key concern, reinforcing India's position as the world's largest defense equipment importer.
Beyond defense, Modi and Trump explored ways to strengthen India's energy ties with the US The Indian leader expressed interest in increasing imports of liquefied natural gas from American producers.
Raghuram Rajan, a professor at the University of Chicago Booth School of Business and former Reserve Bank of India governor, noted that reducing dependence on Russia for arms and increasing energy trade with the US could help India work toward the $500 billion trade target.
Despite positive momentum, challenges remain. Daniel Balazs, a research fellow at the S. Rajaratnam School of International Studies, pointed to issues such as illegal immigration and India's longstanding ties with Russia as potential friction points. "The latter, in particular, is unlikely to go away anytime soon and will probably remain a sore point between the two sides," he said.
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