- India and the U.S. will double trade over the next five years, according to a commitment made by Indian Prime Minister Narendra Modi. The announcement came after Modi and President Donald Trump met in Washington.
- The U.S. is India’s second biggest trading partner, just barely behind China, while India ranks 10th in U.S. trading partners
- Trump also signed a memo ordering “reciprocal tariffs” on all trading partners Thursday.
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The United States and India committed to a massive increase in trade on Thursday, Feb. 13. The leaders of the two nations announced the agreement the same day President Donald Trump signed a memo applying “reciprocal tariffs” on all trading partners.
“We have also set ourselves the target of more than doubling our bilateral trade to attain $500 billion by 2030,” Indian Prime Minister Narendra Modi said during a joint press conference Thursday.
While closing the trade gap is a high priority for Trump, he acknowledged he didn’t come away with everything he initially requested.
We’re just going to say, whatever you charge, we charge.
President Donald Trump on India and tariffs
“I had discussions with India in the first term about the fact that their tariffs were very high, and I was unable to get a concession,” Trump said. “So we’re just going to do it the easy way, and we’re just going to say, whatever you charge, we charge. And I think that’s fair for the people of the United States. And I think it’s actually fair for India.”
Trump aims to even the tariff imbalance
India imposes an average tariff of 17% on favored trading partners, while the U.S. imposes an average tariff of 3.3%, according to World Trade Organization data from 2023.
Before meeting with Modi, Trump signed a presidential memo to apply “reciprocal tariffs” to all trading partners.
“I have decided for purposes of fairness that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them,” Trump told reporters in the Oval Office. “No more, no less. In other words, they charge us a tax or tariff and we charge them the exact same tax or tariff. Very simple.”
Where the U.S.-India trade deficit stands today
During his press conference with Modi, Trump said the latest deal with India will help bring down the trade deficit between the two nations.
“Today, the U.S. trade deficit with India is almost $100 billion and Prime Minister Modi and I have agreed that we’ll begin negotiations to address the long-running disparities that should have been taken care of over the last four years, but they didn’t do that,” Trump said.
U.S. total goods imported from India hit $87.4 billion last year, while exports to India were $41.8 billion, according to the U.S. Trade Representative. The total trade deficit with India was $45.7 billion for 2024. The U.S. is India’s second largest trading partner, just slightly behind China. India comes in as the U.S.’s 10th largest partner.
“And we can make up the difference very easily with the deficit, with the sale of oil and gas, [liquified natural gas], of which we have more than anybody in the world,” Trump added. “The prime minister and I also reached an important agreement on energy that will restore the United States as a leading supplier of oil and gas to India.”
Similarly, Trump told the European Union to buy more U.S. oil to balance trade deficits or face tariffs. On top of energy, the president said the U.S. will sell India F-35 stealth fighters and other military equipment totaling “many billions of dollars.”
Since taking office less than a month ago, the president imposed tariffs on China and steel and aluminum imports. He also announced planned tariffs with Canada and Mexico, America’s largest trading partners, but those were put on hold after both nations made concessions related to illegal border crossings and drug trafficking.
