India and US Close to Reaching Trade Deal Following Positive Dialogue with Prime Minister Modi and President Trump
US and India Make Progress on Trade Deal
US President Donald Trump expressed confidence that the United States and India would reach a trade agreement, citing a good relationship with Prime Minister Narendra Modi. Trump made the comments during a press conference at the Oval Office on Thursday, saying that the two nations would "get to a deal" due to their positive relationship.
The US and India have been engaged in trade talks for several weeks, with a US delegation concluding four days of negotiations in India earlier this week. The trade talks were marked by a spirit of cooperation and pragmatism, according to India's commerce ministry, with both sides reaffirming their commitment to concluding a mutually beneficial agreement that strengthens bilateral trade and economic ties.
Trump referenced the case of Harley-Davidson motorcycles, arguing that high tariffs in India had made it difficult for the iconic American manufacturer to sell its two-wheelers in the country. He noted that India had charged a 200 per cent tariff on Harley-Davidson motorcycles, which led the company to build its own plants in India. In contrast, Trump pointed out that Indian motorcycle brands face no such barriers in the US market.
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| Tariff on Harley-Davidson Motorcycles in India | Tariff on Indian Motorcycle Brands in the US |
|---|---|
| 200 per cent | 0 per cent |
Trump also highlighted the progress made in the trade talks, citing a joint statement issued by India and the US on February 7 after a phone call between Trump and Modi. According to the statement, the US had agreed to reduce tariffs on India to 18 per cent from 50 per cent, and had removed the 25 per cent tariffs on Indian goods for buying Russian oil. However, the US Supreme Court later ruled against Trump's sweeping reciprocal tariffs, which led to a re-negotiation of the trade deal.
The US president announced the imposition of 10 per cent tariffs on all countries for 150 days, starting February 24, following the Supreme Court order. Despite this development, Trump expressed confidence that the US and India would reach a trade agreement.
Investor Takeaway
A potential trade deal between the US and India could have a positive impact on the market.
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