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India-USA to Discuss Tariffs
Context:
India and the United States are set to engage in discussions on tariffs and trade policies following the recent Union Budget’s announcement on the rationalisation of import duties.
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- Prime Minister Narendra Modi will meet with US President Donald Trump next week to revive trade negotiations and address investment concerns.
- The discussions will also cover key areas such as energy and defense.
Revival of Trade Talks and Tariff Adjustments
- Rekindle Trade Talks: Modi’s two-day working visit to the US comes at Trump’s invitation.
- This meeting marks an effort to rekindle trade talks that were initiated during Trump’s first presidency but were put on hold after the change in administration.
- 2025 Budget: A significant development in India’s 2025-26 budget was the restructuring of the import tariff system, reducing rates on over 70% of items.
- This move is expected to address Trump’s criticism of India as a “tariff champion” and an “abuser of tariffs.”
- Import Duties by India: One of the key points of contention between the two countries has been the high import duties India imposed on certain US products, including Harley-Davidson motorcycles.
- In response, India has now reduced tariffs on motorcycles based on engine capacity, a move likely aimed at easing trade tensions.
- No Signal from USA: While there has been no indication of direct tariff action by the US against India, Trump has already imposed a 10% tariff on China and announced a 25% tariff on Mexico and Canada—though the latter was put on hold for negotiations.
- He has also signaled potential tariffs on the European Union.
Addressing Deportation Concerns
- The visit comes amid growing concerns over the treatment of Indians facing deportation from the US.
- Recently, a US military aircraft brought back 104 Indian nationals who were staying illegally in the country.
- The Foreign Secretary acknowledged the outrage over the issue, stating that discussions were ongoing with US officials to ensure better treatment for deportees.
- He also confirmed that there are 487 presumed Indian citizens with final removal orders, of which details for 298 individuals have been provided by US authorities.
- The Indian government is working to verify their identities before facilitating their return.
With trade, defence, technology, and energy cooperation at the forefront, Modi’s visits to the US and France aim to strengthen India’s global partnerships while addressing key economic and diplomatic issues.
