{"id":40606,"date":"2025-04-22T08:38:10","date_gmt":"2025-04-22T08:38:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/40606\/"},"modified":"2025-04-22T08:38:10","modified_gmt":"2025-04-22T08:38:10","slug":"vance-visit-whats-at-stake-for-india-us-trade-amid-trump-tariff-threat-trade-war-news","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/40606\/","title":{"rendered":"Vance visit: What\u2019s at stake for India-US trade amid Trump tariff threat? | Trade War News"},"content":{"rendered":"

New Delhi, India \u2013<\/strong> The optics were warm: As United States Vice President JD Vance and his family visited Narendra Modi on Monday evening, the Indian prime minister showed them around his residence and gave each of the American leader\u2019s three children a peacock feather.<\/p>\n

But behind the smiles and hugs hovered the shadow of US President Donald Trump\u2019s threat to impose major tariffs on Indian goods as a part of the trade war he has unleashed on the world since returning to office in January.<\/p>\n

Vance\u2019s four-day tour, which began on Monday, comes as the Modi government desperately tries to duck US tariffs. These \u201creciprocal\u201d tariffs \u2013 including a 26 percent levy on Indian exports to the US \u2013 are currently on pause for 90 days, until July 8, for all countries except China. India, like all other countries, however, is currently being tariffed at 10 percent.<\/p>\n

The US is India\u2019s largest trading partner and the biggest buyer of its exports. Officials from the two countries have been engaged in intense negotiations to lock down a bilateral trade agreement that would allow them to avoid a tariff battle.<\/p>\n

But those negotiations have prompted concerns among Indian farmers: The country has long used tariffs to shield agriculture from being swamped by products from other countries. Now, farmers critical of Modi fear that the Indian government may weaken those protections as part of a trade deal with Trump.<\/p>\n

As Vance prepared to vacation with his family at India\u2019s famed Taj Mahal and historic forts, dozens of farmers protesting in several villages across India burned his effigies on Monday and raised slogans: \u201cGo back, Vance. India is not for sale!\u201d<\/p>\n

So, what is at stake on Vance\u2019s maiden visit to India? How much do India and the US need each other economically? How much do they tariff each other? And what are the political challenges Modi faces in negotiating a trade deal?<\/p>\n

\"India'sIndia\u2019s Prime Minister Narendra Modi meets US Vice President JD Vance, second lady Usha Vance and their children at his residence in New Delhi, India, April 21, 2025 [India\u2019s Press Information Bureau\/Handout via Reuters]
\nWhat did Modi and Vance talk about?<\/p>\n

On Monday evening, Modi received Vance along with his wife, Usha Vance, whose parents are from India, and their three children at his residence, where the leaders also separately held talks. They \u201creviewed and positively assessed the progress in various areas of bilateral cooperation,\u201d Modi\u2019s office said in a statement late at night.<\/p>\n

The leaders \u201cwelcomed the significant progress in the negotiations for a mutually beneficial\u201d bilateral trade agreement, the statement added, noting \u201ccontinued efforts towards enhancing cooperation in energy, defence, strategic technologies and other areas\u201d.<\/p>\n

However, the statements did not delve into the details of the ongoing closed-door trade negotiations.<\/p>\n

Vance\u2019s office said in a statement that a bilateral trade agreement presents an opportunity to negotiate a new and modern one focused on promoting job creation and citizen wellbeing in both countries.<\/p>\n

The US vice president\u2019s visit builds on early engagement between the two governments in Trump\u2019s second term. Modi was among the earliest leaders to meet Trump in Washington, DC in February, and Trump is expected to visit India later this year for a summit of the Quad grouping, which consists of the US, India, Japan and Australia, and is widely seen as a counter to China\u2019s influence in the Asia Pacific region.<\/p>\n

Randhir Jaiswal, India\u2019s Ministry of External Affairs spokesperson, said Monday that Vance\u2019s visit would \u201cfurther deepen the India-US comprehensive global strategic partnership\u201d.<\/p>\n

\"PresidentUS President Donald Trump, right, speaks with India\u2019s Prime Minister Narendra Modi during a news conference in the East Room of the White House, Thursday, February 13, 2025, in Washington, DC [FILE: Ben Curtis\/AP Photo]
\nWhat\u2019s Vance\u2019s visit really about?<\/p>\n

While India views the US as a critical strategic partner as New Delhi increasingly battles Beijing\u2019s clout in the Indian Ocean region, Washington, too, sees the world\u2019s largest democracy as a counterbalance to China.<\/p>\n

But Trump\u2019s tariff threats have perturbed that broader convergence of interests.<\/p>\n

During Vance\u2019s visit, India\u2019s efforts will be focused on expediting trade negotiations with the US, said Anil Trigunayat, a former Indian diplomat who has served in the US, \u201cso that there is minimal damage to ongoing trade, as the US is India\u2019s biggest trading partner\u201d.<\/p>\n

Yet some critics worry that the Modi government\u2019s bet on the PM\u2019s bonhomie with Trump \u2013 they have both described each other as friends \u2013 to resolve tariff tensions might be misplaced. Unlike China, the European Union or Canada, India has avoided responding to Trump\u2019s threats with its own countermeasures.<\/p>\n

\u201cThe Indian side has not shown any strength or resilience. All of the public indications have shown that they have been extremely pliable and trying to please the US government,\u201d said Jayati Ghosh, economics professor at the University of Massachusetts Amherst.<\/p>\n

\u201cThe US is essentially using bullying tactics to try and extract as many concessions as possible,\u201d Ghosh told Al Jazeera. \u201cIt is very bad for India\u2019s security and economy \u2013 and it is unacceptable.\u201d<\/p>\n

\"INTERACTIVE<\/p>\n

How much do India and the US trade with each other?<\/p>\n

For several years, the US and China have competed for the tag of India\u2019s largest trading partner.<\/p>\n

In 2024, the US pipped China to the top slot: India-US bilateral trade was worth $129.2bn, per US government trade data. India-China trade was worth $127.7bn.<\/p>\n

But trade with China primarily comprises of India importing from its larger neighbour \u2013 India imported more than $110bn worth from China and exported less than $15bn in 2024.<\/p>\n

By contrast, India\u2019s balance of trade is very favourable with the US, and the countries are eyeing an ambitious target of expanding their bilateral trade to $500bn by 2030.<\/p>\n

Last year, US exports to India amounted to $41.8bn. While oils and fuels maintain a nearly 30 percent share with almost $13bn, they are followed by precious pearls and stones, amounting to $5.16bn. India also imports parts of nuclear reactors, electrical machinery and equipment, and medical instruments from the US.<\/p>\n

The US, meanwhile, is India\u2019s biggest export market. Indian exports to the US totalled $87.4bn in 2024. Pearls, electrical machinery, and pharmaceutical products lead India\u2019s export products.<\/p>\n

India also exports organic chemicals, textile articles, steel and apparel to the US.<\/p>\n

The US trade deficit with India stands at $45.7bn in 2024, in New Delhi\u2019s favour. That is small compared with the US trade deficit with China \u2013 $295bn last year. Still, India ranks 10th among countries that the US has the largest trade deficits with.<\/p>\n

\"IndianIndian bikers ride their Harley Davidson motorbikes in Guwahati, India, on Thursday, April 3, 2025. India has cut tariffs on these bikes \u2013 but they remain high [Anupam Nath\/AP Photo]
\nWhat has Trump accused India of?<\/p>\n

As Trump has engaged in an all-out trade war with China, the US president has also railed repeatedly against India, describing it as a \u201ctariff abuser\u201d and \u201ctariff king\u201d. Trump insists that many countries \u2013 including China and India \u2013 have cheated the US, gaming globalisation to sell the US much more than they buy from it and using tariffs to achieve this goal.<\/p>\n

In a joint news conference during Modi\u2019s Washington visit in February, Trump noted that India has \u201cbeen very strong on tariffs\u201d. \u201cIt\u2019s very hard to sell into India because they have trade barriers, very strong tariffs,\u201d he said.<\/p>\n

He repeated that allegation in public, at least three times, in March. \u201cIndia charges us massive tariffs, massive, you can\u2019t even sell anything into India. It\u2019s almost, it\u2019s almost restrictive. It is restrictive. We do very little business inside,\u201d Trump said.<\/p>\n

He did, however, concede that the Indian government was accommodating some of his concerns.<\/p>\n

\u201cThey\u2019ve agreed, by the way, they want to cut their tariffs way down now because somebody\u2019s finally exposing them for what they\u2019ve done,\u201d Trump said.<\/p>\n

\"InIn this June 21, 2019 photo, almonds hang on the branches of an almond tree in an orchard in Modesto, California. India\u2019s average tariff rate on agricultural imports is 39 percent, compared with just 4 percent that the US levies on average [FILE: Rich Pedroncelli\/AP Photo]
\nHow high are India\u2019s tariffs on US goods?<\/p>\n

Indeed, as Trump said, India has already offered some concessions to the US in recent weeks, slashing tariffs on luxury goods like bourbon \u2013 down from 150 to 100 percent \u2013 and high-end motorcycle brands like Harley Davidson \u2013 from 50 to 40 percent.<\/p>\n

But even with those cuts, current tariff rates remain very high \u2013 and much higher than the tariffs that Indian goods face in the US.<\/p>\n

While bourbon has received some relief, all other imported alcohol is still tariffed at 150 percent. The duty on premium cars and motorcycles can go up to 125 percent, and agricultural products like walnuts face a 100 percent tariff.<\/p>\n

India\u2019s average tariff rate is 17 percent, compared with 3.3 percent by the US, as per a report by the Indian Council for Research on International Economic Relations (ICRIER).<\/p>\n

\u201cThe most striking difference is in the agriculture sector, where India\u2019s tariffs are notably higher,\u201d ICRIER said in the February report.<\/p>\n

The simple average tariff rate that India imposes on agricultural imports is 39 percent, according to ICRIER \u2013 pointing to the country\u2019s protectionist policies. By contrast, the Indian think tank found, \u201cthe US maintains relatively low agricultural tariffs.\u201d The simple average tariff rate that the US charges on agricultural imports is 4 percent.<\/p>\n

The gulf is wide in other sectors, too.<\/p>\n

US pharmaceutical exports to India face a 10.9 percent tariff. By contrast, Indian pharma products face a tiny 0.01 percent tariff while entering the US.<\/p>\n

US electronics exports to India are taxed at 7.64 percent, while Indian electronics exports to the US face a mere 0.41 percent tariff. \u200b<\/p>\n

\"India'sIndia\u2019s Finance Minister Nirmala Sitharaman, seen here, said on April 21, 2025 that India expects the first phase of a trade deal with the US to be complete by the end of the year [FILE: Justin Tallis\/Pool Photo via AP]
\nHow are India-US tariff negotiations shaping up?<\/p>\n

So far, the early tariff cuts on bourbon and high-end motorbikes have helped India signal to the US that it is open to negotiations on lifting levies further.<\/p>\n

Now, talks are on, and on Monday, Indian Finance Minister Nirmala Sitharaman said a first phase of a trade deal with the US could be ready by the end of the year.<\/p>\n

But it is unclear if that timeline will work for Trump, whose 90-day respite ends in July. Trump\u2019s coercive approach, said trade economist Biswajit Dhar, is not conducive to diplomacy.<\/p>\n

\u201cTrump doesn\u2019t want rules in trade,\u201d said Dhar, describing the US president\u2019s approach as \u201claws of the jungle\u201d.<\/p>\n

\u201cIndia has to ensure that it\u2019s a win-win situation. We cannot have Trump have his say,\u201d he said.<\/p>\n

Trigunayat, the retired diplomat who has participated in several multi-national trade treaties, said it was important for the Modi government to be transparent, during negotiations, about its political limitations.<\/p>\n

\u201cIt is very important to put your cards on the table and explain your domestic situation,\u201d he said. \u201cOn an international level, we start with a maximalist position. And then they come somewhere in between.\u201d<\/p>\n

\u201cBut we always must safeguard our citizens\u2019 needs.\u201d<\/p>\n

And nowhere is that conundrum sharper than in agriculture.<\/p>\n

\"ActivistsFarmers shout slogans during a protest against the visit of US Vice President JD Vance to India, in Hyderabad, India, Monday, April 21, 2025 [Mahesh Kumar A\/AP Photo]
\nCan India slash agriculture tariffs?<\/p>\n

In the last five decades, India has transitioned from a food-deficit nation to a food-surplus one and has become a leading exporter of agricultural products. For instance, India accounts for 40 percent of global rice exports.<\/p>\n

But India has kept tariffs high to safeguard its farmers from imports that might otherwise flood domestic markets \u2013 nearly half of India\u2019s population is dependent on farming or the agricultural sector.<\/p>\n

India also exports shrimp, vegetable extracts, castor oil, and black pepper; in turn, the US sends walnuts, apples, almonds, and pistachios.<\/p>\n

Now, the US wants to balance that equation and has pressured India to reduce tariffs so that its farm products can enter the world\u2019s most populous nation more easily.<\/p>\n

That prospect has many Indian farmers on edge.<\/p>\n

\u201cWe are completely kept in the dark about these trade negotiations \u2013 there is no transparency; and in a federal setup like India, how can the government function like this?\u201d said Vijoo Krishnan, general secretary of the All India Kisan Sabha (AIKS), India\u2019s oldest farmers\u2019 union that is leading the protests against Vance\u2019s visit. The AIKS is the farmers\u2019 wing of the Communist Party of India, which is part of the national opposition.<\/p>\n

\u201cThe Modi government has been sliding in a direction of free trade and slashing import duties \u2013 and if it includes the farming sector, then we are doomed,\u201d he said, arguing that an Indian farmer would not be able to compete with Western counterparts, who are \u201cmuch richer\u201d.<\/p>\n

Indian farmers have already once shown their political might to Modi: Huge protests forced the prime minister to withdraw three controversial farm laws in 2021.<\/p>\n

\u201cThe protests and rolling back the laws were a humiliating defeat for the Modi government \u2013 they are taking revenge on the farmers by pushing them under the bus now [through a trade deal with Trump],\u201d claimed Krishnan.<\/p>\n

Any tariff waivers on agricultural imports would need to be weighed against the risks they might pose to the livelihood of millions of Indian farmers, cautioned Dhar, the trade economist.<\/p>\n

\u201cIf we bow to the US demands in negotiations, it is going to create a whole lot of economic,\u00a0 social and political problems for the government,\u201d Dhar said. \u201cThey cannot really afford to risk the lives of millions of Indians.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"New Delhi, India \u2013 The optics were warm: As United States Vice President JD Vance and his family…\n","protected":false},"author":2,"featured_media":40607,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[3971,521,12633,32,13641,730,3058,22817,12,285,1219,49,978,286,659],"class_list":{"0":"post-40606","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-agriculture","9":"tag-asia","10":"tag-business-and-economy","11":"tag-donald-trump","12":"tag-explainer","13":"tag-india","14":"tag-international-trade","15":"tag-narendra-modi","16":"tag-news","17":"tag-politics","18":"tag-trade-war","19":"tag-united-states","20":"tag-us","21":"tag-us-canada","22":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114380715116943433","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/40606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=40606"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/40606\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/40607"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=40606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=40606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=40606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}