US-India economic ties may fortify under Trump's presidency
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The relationship between India and the United States has seen a significant evolution in trade over the past decade, with each administration bringing its unique priorities, challenges, and strategic alignments.
Under President Obama (2009–2017):
Trade relations between the two nations improved gradually, forming part of a broader deepening of strategic and economic ties. The Obama administration relaxed export controls on dual-use technologies to India and reversed longstanding U.S. opposition to India's strategic programs. The relationship flourished, particularly in the ICT, engineering, and medical sectors, alongside cooperation on counterterrorism. The influence of the Indian-American diaspora in the U.S. also played a crucial role. However, a major free trade agreement eluded the two nations, with trade barriers still present on both sides [2].
Under President Trump (2017–2021):
Trade relations became more contentious, with President Trump labeling India as the "tariff king" and imposing significant tariffs on Indian goods. This intensified trade tensions despite efforts by New Delhi to maintain warm political ties. Negotiations for an interim trade deal accelerated to avoid punitive tariffs, reflecting both sides' interest in preserving economic cooperation. India sought exemptions and concessions due to these tariffs. Despite the tensions, strategic collaboration, including on countering China, remained a focus [1][3][4].
Under President Biden (2021–present):
The Biden administration has continued cooperation with India on strategic fronts like counter-terrorism and Indo-Pacific economic initiatives but has made limited progress in reducing trade barriers or signing a comprehensive trade deal. While some previous tariffs and WTO disputes have been addressed, substantive market access improvements are still elusive. Negotiations for a trade deal continue urgently, with both sides seeing the economic and geopolitical benefits of closer economic ties, particularly in countering China’s manufacturing dominance and securing supply chains. The current context is one of cautious optimism but also significant hurdles due to mutual tariff demands [1][4].
Current Expectations for Future Trade Growth:
There is significant interest on both sides in finalizing an initial trade deal, seen as a confidence-building measure that could unlock broader cooperation across defense, technology, energy, and education. India aims to leverage the partnership to attract investment and advance high-tech sector growth, potentially undercutting China’s manufacturing dominance. The next trade agreement is expected to focus on reducing tariffs and tackling economic security issues, but challenges remain around key sectors such as agriculture in India. A successful deal is viewed as vital to sustaining and boosting the broader U.S.-India partnership and trade growth moving forward [1][3][4].
During the administration of Indian Prime Minister Narendra Modi, trade between India and the U.S. reached significant levels, exceeding $118 billion in the 2023-2024 period [5]. Business circles in India predict that the trade turnover could increase by another $50 billion in the next two to three years [6]. The head of an unspecified agency expressed eagerness for interaction with the new U.S. administration [7].
The Economic Times reported that Trump criticized India's trade policy [8], and in December of the previous year, Trump threatened to impose retaliatory tariffs on Indian products [9]. The productivity of bilateral relations between India and the U.S. was a topic of discussion [10][11][12].
In conclusion, the evolution of trade relations between India and the U.S. under Presidents Obama, Trump, and Biden reflects shifting priorities, challenges, and strategic alignment over the past decade. The near-term outlook depends on concluding a trade agreement that balances tariff reductions with economic security goals, potentially unlocking stronger future trade growth.
- Economic ties between India and the United States are anticipated to escalate further within the next few years, with business circles in India predicting a $50 billion increase in trade turnover.
- Despite political adjustments under different administrations, including those of Presidents Obama, Trump, and Biden, the need for a comprehensive trade agreement remains essential to address economic security issues and boost mutual trade growth, particularly in countering China’s manufacturing dominance.
