India and the U.S. are set to discuss a potential free trade pact as PM Modi prepares to meet Donald Trump next week. Key issues include tariffs, market access, and defense cooperation.
New Delhi/Washington – As India and the United States gear up for a crucial high-level meeting, sources indicate that negotiations for a potential India-US Free Trade Agreement (FTA) are back on the table. Indian Prime Minister Narendra Modi is expected to meet former U.S. President Donald Trump next week, marking a significant diplomatic engagement between the two nations.
The meeting, anticipated to take place between February 12 and 14, 2025, is expected to focus on bilateral trade, investment opportunities, and tariff reductions. Officials from both sides have been working behind the scenes to iron out key trade differences, with an emphasis on addressing long-standing tariff disputes and enhancing market access for goods and services.
A senior Indian government official stated, “Both nations have been working toward a comprehensive economic partnership, and this meeting could provide the momentum needed to finalize key aspects of a trade pact.”
The U.S. is pushing for lower tariffs on agricultural goods, medical devices, and high-tech equipment, while India is seeking greater access for its IT services, textiles, and pharmaceuticals in the American market.
Ahead of the meeting, India is considering reviewing tariffs on over 30 key items, including:
The proposed tariff reductions aim to improve bilateral trade relations, which have often been marred by protectionist policies from both sides.
Apart from trade discussions, India is reportedly looking to purchase more U.S.-made defense equipment, including drones and fighter jets, in an effort to rebalance trade relations and strengthen its defense capabilities. This move aligns with Washington’s strategic interest in countering China’s influence in the Indo-Pacific region.
A senior U.S. official stated, “Defense deals will play a crucial role in strengthening our partnership, ensuring both economic and security benefits for both countries.”
India and the U.S. have faced multiple trade disputes over the years. Under Trump’s previous administration, Washington removed India from its Generalized System of Preferences (GSP) program, citing market access issues. The Indian government has since been pushing for a reinstatement of preferential trade benefits, which could be a topic of discussion in the upcoming meeting.
Additionally, both sides have sparred over:
If negotiations proceed successfully, India and the U.S. may announce a framework agreement, paving the way for a comprehensive free trade deal in the near future. The trade pact is expected to:
✔ Boost bilateral trade, currently valued at over $200 billion annually
✔ Provide market access to Indian and American businesses
✔ Reduce tariff barriers on key products
✔ Strengthen India-US economic cooperation across sectors
A formal announcement regarding the trade talks and potential agreements is expected following the high-profile meeting.
With the upcoming discussions being closely watched by global markets, stakeholders from various industries will be keenly observing any developments that could shape the future of India-U.S. economic relations.
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