India and the United States have set the ball rolling for the biggest trade boost spanning defence, energy and other sectors. The US and India have a trade deficit of $50 billion in New Delhi’s favour. The Indo-US goods and services trade totalled around $190.1 billion in 2023. The Trump administration has been looking to bridge the trade deficit and get tariffs imposed by India reduced by warning of reciprocal tariffs.
“The leaders resolved to expand trade and investment to make their citizens more prosperous, nations stronger, economies more innovative and supply chains more resilient. They resolved to deepen the US-India trade relationship to promote growth that ensures fairness, national security and job creation. To this end, the leaders set a bold new goal for bilateral trade – “Mission 500” – aiming to more than double total bilateral trade to $500 billion by 2030,” said the Ministry of External Affairs in a statement.
Now, the two countries have announced that they will conclude the first phase of a mega trade pact by this year and set a target of USD 500 billion in annual trade by 2030. President Trump hosted Prime Minister Narendra Modi for wide-ranging talks at the White House on Thursday (Friday as per India time) that focused on a range of critical issues including tariffs.
“The leaders welcomed early steps to demonstrate a mutual commitment to address bilateral trade barriers. The United States welcomed India’s recent measures to lower tariffs on US products of interest in the areas of bourbon, motorcycles, ICT products and metals, as well as measures to enhance market access for US agricultural products, like alfalfa hay and duck meat, and medical devices,” said the statement.
The meeting took place just hours after the US President unveiled a new reciprocal tariff policy affecting all of America’s trading partners, including India. In a move to expand bilateral ties across critical sectors, Trump and Modi introduced a new initiative titled ‘US-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce, and Technology) for the 21st Century.’
This initiative is designed to foster transformative progress across key areas of cooperation, strengthening defence, trade, and technological collaboration between the two nations. At a joint media briefing with Modi, Trump announced that he and Modi agreed on a deal that would facilitate India to import more US oil and gas to bring down Washington’s trade deficit.
“Today, we have set a target of more than doubling bilateral trade to 500 billion dollars by 2030. Our teams will work on an early conclusion of a mutually beneficial trade agreement,” Modi said.
Modi and Trump committed to drive opportunities for US and Indian companies to make greenfield investments in high-value industries in each other’s countries. In this regard, the leaders welcomed ongoing investments by Indian companies worth approximately USD 7.35 billion, such as those by Hindalco’s Novelis in finished aluminium goods at their state-of-the-art facilities in Alabama and Kentucky; JSW in steel manufacturing operations at Texas and Ohio; Epsilon Advanced Materials in the manufacture of critical battery materials in North Carolina.
