The economic relationship between India and the United States is generally considered good for both parties. Two-Way Trade is growing and, only among Asian countries, India acts routinely with the United States than with China, the neighbor and rival.
But under President Trump, trade is a point of friction. Just like almost all countries that do business with the United States, India has a surplus: last year it sent around $ 87 billion in goods and imported $ 42 billion, adding $ 46 billion to the trade shortage of America.
Mr. Trump does not like that kind of figures. He has risen against countries that sell more to the United States than they buy. CUE's furious imposition of rates on both allies and enemies, causing threats to retreat and disturbing global trade.
During his first term, President Trump called India 'The Tariff King'. He pointed to Indian tasks at some American goods as high as 100 percent. He was mainly focused on a rate he said he was blocking Harley-Davidson to export more motorcycles. When India's trade officials lowered that rate, Mr. Trump paraphrased them: “” We want to keep your president happy. 'Isn't that fun? “
This week, when Mr. Trump sits down in Washington with Narendra Modi, the Indian Prime Minister, it is expected that rates are again a subject of conversation. This is what you need to know about the trade relationship between India and the United States.
Does India really use US trade?
The trade surplus of India with the United States has grown under Mr. Modi, which took office in 2014. Which had been around $ 20 billion to $ 24 billion annually to $ 33 billion in 2021. But more importantly, back and forth trade between trade between trade between the trade two grows with a similar pace: as a percentage of The total the surplus has almost remained stable.
India has a complicated list of rates. There are hundreds of categories taxed at various rates that can change wild from year to year. That is an inheritance from the colonial era of India, when Great -Britain used commercial practices when exploiting its resources.
Since 1990, when India has more in the field of world trade and investments, the average rate has fallen, from 125 percent to less than 5 percent on most goods imported from the United States.
Unlike most Asian countries, India has its own trade shortage to worry about. The United States has the world's largest, at $ 1.2 trillion, but that is less than 4 percent of its economy. Richard Rossow, who is following India at the Center for Strategic and International Studies in Washington, pointed out that India, which depends on the input for the majority of fuel needs, has a shortage between 8 and 12 percent for most years. That has driven the value of the currency of India, the rupee, to painful levels.
What does India act with America?
Most of what these two countries act fall under the category oil and petrochemicals, or those of precious stones. In both cases, the United States is sent huge amounts of raw or semi-processed material to India, where refineries or precious stones are incorporated in their workshops. In some cases, the finished products immediately return to the United States.
Other important parts of their economic relationship are the trade in services, including financial investments and high -quality professional work that is done for American companies by personnel in India. But Mr Trump has focused on trade in goods.
What could India do to satisfy Trump?
That only leaves a little room for the two leaders. “Going back to the first Trump administration, to buy India more American hydrocarbons, was at the top of the list, along with Defense,” said Mr. Rossow. Last week Mr. Trump claimed a victory after a meeting with the Japanese prime minister, Shigeru Ishiba, and said he had agreed to import more liquid natural gas.
In recent years, India has spent between $ 1.5 billion and $ 4 billion on the import of US defense in recent years, and would have difficulty taking on expensive new systems, such as fighter jets. It has excellent orders from Russian and French suppliers. Nevertheless, weapons and gas, which can only buy India's national government, keep them promising as a way to stamp the trade onbalance.
There is some room for India to make offers about rates. American producers of Bourbon and Pecanoten hope that Mr. Trump could bring down commercial barriers to love Indian consumers. Similar limitations on poultry and Californian almonds have already been relaxed. The Indian demand for such goods is minimal, but in trade negotiations a lower rate is a lower rate.
Then of course there is Harley-Davidson from Milwaukee. The heavyweight bicycles of the company are hit by 50 percent rates on their way to India, although from 1 May it will fall to 30 percent after a recent change by the government of Mr Modi. Since 2020, Harley had exported only a few hundred bicycles a year to India. Last year it worked together with a local manufacturer, came up with a model that sells for around $ 3,000 and sold more than 14,000. But none of them counted as import.
