Latest news with #IndiaUSRelations
Washington Post
3 days ago
- Business
- Washington Post
Whiplash rulings on Trump's tariffs could impact global trade talks
NEW DELHI — For months, Indian trade officials have been racing to finalize a long-anticipated agreement with Washington — a process thrown into high gear after the United States announced broad tariffs on April 2 targeting nearly 60 countries, including India. The levies, announced by President Donald Trump on what he called 'Liberation Day,' dominated India's business pages and intensified pressure on New Delhi to close a deal.
CNA
6 days ago
- Business
- CNA
Indian Foreign Secretary Vikram Misri begins 3-day visit to US
India's Foreign Secretary Vikram Misri begins a three-day visit to Washington, where he will meet senior officials of the Trump administration. The trip follows Prime Minister Narendra Modi's visit in February, during which a new strategic partnership was unveiled. Neha Poonia reports from New Delhi.
South China Morning Post
23-05-2025
- Business
- South China Morning Post
India moves closer to trade deals with US and EU with lower tariffs as key aim
The visit by India 's Commerce Minister Piyush Goyal to the US this week has raised hopes of a phased trade deal between both sides that sidesteps Washington's steep tariffs, as New Delhi also pushes for a separate agreement with the European Union (EU) amid rising global protectionism. The US initially announced new tariffs last month on imports from various countries, including a 26 per cent levy on India. It later suspended the tariffs on all its trade partners except China for 90 days until July, leaving only a baseline 10 per cent tariff in place and offering room for negotiations. Trade talks between India and the US were progressing well but appeared to have hit a roadblock after Delhi filed a formal dispute at the World Trade Organization (WTO) earlier this month against a 25 per cent US tariff on all steel and aluminium imports. However, Goyal's upbeat tone during the US visit indicated that the issue would unlikely block a broader deal between both sides, according to analysts. 'Held a constructive meeting with Secretary @HowardLutnick for a mutually beneficial trade agreement. Committed to enhancing opportunities for our businesses and people,' Goyal posted to social media on Thursday, hours after meeting US Commerce Secretary of State Howard Lutnick. India and the US would likely announce the outcome of their trade agreement in phases, covering tariffs and other issues, including investments, non-tariff barriers and quality control of goods, analysts said. 'The main issue of these negotiations [during Goyal's visit] is to avoid the first tranche of tariffs once the 90-day period is over. India will like a soft landing and will choose certain sectors so that there is no impact,' said Vivek Mishra, deputy director of the strategic studies programme at the Observer Research Foundation.
New York Times
22-05-2025
- Business
- New York Times
What Trump's Apple Threat Means for India's Tariff Negotiations
Even after President Trump hit it with a 26 percent tariff, India had reason to be hopeful about trade negotiations with the United States. China was facing even higher import taxes. So were smaller Asian countries whose exports compete with India, like Vietnam and Bangladesh. That positioned India to use the trade war to advance its goal of luring the business that was expected to flee its giant neighbor. Plus, India's prime minister, Narendra Modi, had a cozy relationship with Mr. Trump. Things are looking tougher for India now, and for its American business partners. Mr. Trump has changed up his tactics with China, backing off his highest tariffs. That wrong-footed India, which now faces tariffs not much lower than China's. Then he threw a wrench into India's relationship with Apple, the single most striking example of an American company that reoriented its production away from Chinese suppliers. A few years ago, nearly every iPhone was assembled in China. By the end of this year, an estimated 25 percent or more will be made in India. Last week, Mr. Trump revealed that he does not see that as progress: He said Apple's production should skip India and move to the United States instead. India is working to secure a reduction in the 26 percent tariff, which Mr. Trump paused until early July to give the countries time to talk. Officials in New Delhi are not entirely sure what to make of Mr. Trump's remarks about Apple. But they have complicated an already complex negotiation before the tariff reprieve ends. Indian officials were in Washington this week, trying to hash out a deal. Piyush Goyal, the commerce minister, had already hopped back and forth from New Delhi twice since Mr. Trump was re-elected. On Tuesday, after wrapping up a meeting with his American counterpart, Howard Lutnick, Mr. Goyal posted on social media that he was 'expediting the first tranche of India-U.S. Bilateral Trade Agreement.' With the word 'tranche,' he dropped a clue that India sees any agreement playing out as a series. But there is no certainty about the path for the talks, as the past 10 days have made frustratingly clear in New Delhi. Before he added Apple to the chaotic dynamic, Mr. Trump conflated India's trade negotiations with its recent conflict with its nuclear-armed neighbor Pakistan. Indian diplomats were frustrated when the American president claimed the credit for brokering a cease-fire and then offered to step into their dangerous dispute over the region of Kashmir. India's government was made even more unhappy when Mr. Trump then inserted trade into his account of the peacemaking. 'I said, 'Come on, we're going to do a lot of trade with you guys,'' he said on May 12. 'People have never really used trade the way I used it.' A senior Indian official denied that trade had even been discussed. Then, on May 15, Mr. Trump demanded that Apple stop its yearslong efforts to reduce its reliance on China and make iPhones in India. 'I told Tim Cook: 'We're not interested in you building in India. They can take care of themselves; you up your production'' in the United States, he said, referring to Apple's chief executive. The demand is a slap in the face for India, a close U.S. partner that for many American companies has been an increasingly viable location to lessen their dependence on China. Ever since the Covid-19 pandemic, global businesses that depend on China have been looking for ways to pare the risk of relying too much on one big country. India assured its American friends that it could take up the slack. No country can match China for its extensive and efficient factories, and Apple's roots there are deep. So it is a point of pride for many in Indian government and business that Apple has shifted some of its iPhone assembly. The idea that Apple could redirect its manufacturing capacity from China straight to the United States — bypassing India — caused a collective double take. Apple did not respond to a request to comment. 'Everyone wants manufacturing at home,' said Prachir Singh, an analyst in India for Counterpoint Research, which covers technology companies. But that's much easier said than done. 'If you talk about iPhones, there are more than 1,000 components. It took almost a decade for Apple to set up such a supply chain in China,' Mr. Singh said. 'And it took more than five years to reach some capacity here.' Several factors went into making parts of India competitive with China's manufacturing marvel. In the southern state of Tamil Nadu, at the heart of Apple's supply chain in India, the local government has helped companies like Foxconn, the Taiwanese giant that has made iPhones in China for years, by building workers' dormitories and providing other China-style infrastructure. India's national government has been subsidizing the manufacture of high-tech goods since 2020. Labor costs are low across India. Local trade unions in Tamil Nadu estimate that the average monthly salary was equivalent to $233. Wages even for jobs that require engineering degrees are competitive enough with costs in China. Finally, companies like Foxconn have helped local businesses upgrade the value chain in India, by building more of the iPhone's components in India. That creates what factory managers call an ecosystem: dense clusters of talent and supply that are starting to give India the kind of industrial edge that China showed more than 20 years ago. Two people in contact with the Indian trade negotiators, requesting anonymity to discuss sensitive matters, said they did not believe that India was at risk of losing Apple's business. They added that it was unthinkable to them that the United States would be ready to compete with India's advantages in manufacturing. Instead, they said, it must be a bargaining tactic.
Al Jazeera
16-05-2025
- Business
- Al Jazeera
Has India offered Trump zero tariffs? What we know and why it matters
United States President Donald Trump said on Thursday that India had offered a trade deal that proposed almost 'no tariffs' on US goods, as the South Asian nation seeks to avert higher import and export costs. India disputed Trump's claim. But New Delhi is looking to clinch a trade deal with the US within the 90-day pause announced by Trump on April 9, on so called reciprocal tariffs for major trading partners. On May 8, the White House secured a trade agreement with the United Kingdom, two days after India inked a similar pact with it. India's equity benchmarks jumped about 1.5 percent following Trump's comments. The Nifty 50 edged up 1.6 percent while the BSE Sensex gained 1.48 percent, reaching their highest levels in seven months. India was one of the first countries to begin trade negotiations with the US following Prime Minister Narendra Modi's visit to the White House in February, with both sides agreeing to finalise a bilateral deal this year. Last month, meanwhile, US Vice President JD Vance visited India and met with Prime Minister Narendra Modi, hailing what he called 'very good progress' on a trade agreement between Washington and New Delhi. 'It is very hard to sell in India, and they are offering us a deal where basically they are willing to literally charge us no tariffs,' Trump said in a meeting with executives in the Qatari capital Doha. 'They're the highest and now they're saying no tariff.' In a statement soon after to local news agencies, India's Foreign Minister Subrahmanyam Jaishankar pushed back against Trump's claim, saying 'nothing is decided till everything is.' He added that 'any judgement on it would be premature' until a 'mutually beneficial' agreement is reached. Trump didn't provide further details of New Delhi's apparent offer, and the Indian Ministry of Commerce and Industry didn't immediately respond to media requests for comment. The US is India's largest trading partner, with bilateral trade totalling some $129bn in 2024. India ran a $45.7bn surplus with the US last year, mainly in the form of pharmaceutical products, electrical machinery and jewellery. Having long complained that India's tariffs were too high and hurt US businesses, Trump pledged to impose 'reciprocal' tariffs of 27 percent on India. Those tariffs are currently on hold until early July. A 10 percent base tariff continues to apply to India and many other nations during the pause. India's average tariff rate is 17 percent, compared with 3.3 percent by the US, as per a report by the Indian Council for Research on International Economic Relations. In recent weeks, India has made overtures to placate Trump's public disapproval, including lowering import duties on US goods like bourbon whiskey – down from 150 to 100 percent – and Harley-Davidson motorcycles – from 50 to 40 percent. As part of ongoing trade talks, New Delhi has also proposed zero tariffs on car parts, on a reciprocal basis and up to a certain amount, Bloomberg reported earlier this month. A delegation of Indian officials is set to visit the US later this month to try and move talks forward. The Reuters news agency reported that India's trade minister, Piyush Goyal, might visit too. Trump's recent comments come days after India threatened to impose retaliatory tariffs linked to higher US duties on steel and aluminium, a sign that New Delhi is adopting a more bullish approach in its negotiations with Washington. For now, though, trade talks are thought to be progressing well. Reuters reported that New Delhi has offered to reduce duties to zero on 60 percent of US imports in a first phase deal, while also offering preferential access to nearly 90 percent of the merchandise India imports from the US. In theory, this would bring the average tariff differential (the variation in tariff rates countries impose on each other) between India and the US down by 9 percentage points, significantly lowering trade barriers in the world's fifth-largest economy. Preferential market access – or lower import entry requirements into the US compared with other countries India trades with – is being considered for key goods such as jewellery, textiles and agricultural products like bananas and grapes. 'Preferential market access for India would mean better terms of trade for these goods compared to America's other trading partners,' an Indian government official who preferred not to be named told Reuters. To make the deal more attractive for Washington, India has also offered to ease export regulations on several high-value US imports, the first official said. These include aircraft, electric vehicles, medical devices, and hydrocarbons. Beyond tariffs, India has also asked the US to treat it on par with other top US allies such as the UK and Japan in terms of access to critical technology sectors like artificial intelligence, biotech, and semiconductors. India's expectation of being exempt from tariffs is at odds with the deal struck between the US and UK, in which only certain goods, based on mutual interest, had tariffs removed – as opposed to across-the-board withdrawals. Elsewhere, US Treasury Secretary Scott Bessent last week hinted that Washington might be looking to secure 'purchase agreements' for specific products with China, as part of ongoing trade negotiations with Beijing. As such, recent trade deals suggest that Trump's tariff strategy amounts to carve-outs on particular goods, as opposed to broad free trade agreements. Looking ahead, comments from Indian and US officials hint at a similar arrangement. Domestic issues also stand in the way of a free trade deal. India has long used tariffs to shield agricultural markets from cheap imports. Farmers have expressed fears that Modi would weaken those protections as part of a deal with Trump. Then, at the geopolitical level too, India is in a tricky position. While Washington sees New Delhi as a counterbalance to Beijing's growing clout, India imported $113.45bn from China last year. By contrast, it imported just $40bn from the US. What's more, China recently warned the UK over its trade deal with the US. It accused the UK of aligning with the US in a move that could compel British companies to exclude Chinese products from their supply chains. China has warned it is ready to hurt countries that fall in line with the US in order to pressure Beijing. For its part, India has recently shown willingness to engage in trade deals after years of scepticism. Last week, it inked a pact with the UK that will substantially lower duties on many goods.
