Indian PM Narendra Modi and US President Donald Trump . - ANI via The Statesman/ANN
NEW DELHI: India needs to buy more defence products and lower its tariffs on US products for the two countries to be able to sign a “grand” bilateral deal, US Commerce Secretary Howard Lutnick says.
India’s import tariffs, among the highest in the world, warrant a reassessment of its “special relationship” with the United States, Lutnick told India Today television, speaking from Washington.
He also asked India to shift defence equipment purchases away from Russia.
Lutnick’s remarks come weeks ahead of US President Donald Trump’s planned reciprocal tariffs from early April on trading partners, including India, which are worrying exporters across sectors ranging from autos to electronics.
“We would like to focus on a bilateral conversation just between India and the United States - bring down the tariff levels that India has, that protects some of its areas,” Lutnick said.
For sensitive industries like agriculture, which India has long shielded to support its small farmers, Lutnick suggested a trade agreement with quotas and limits but emphasised that India must open up the sector.
After a meeting between Trump and Indian Prime Minister Narendra Modi last month, the two countries agreed to resolve tariff rows and work on the first segment of a deal by the second half of this year, aiming for bilateral trade worth US$500bil by 2030.
Indian Trade Minister Piyush Goyal has been on a nearly week-long trip to the United States and last Tuesday met Lutnick to pursue trade talks.
“Maybe certain products have quotas. Maybe certain products have limits. And then we do the same thing on the other side and craft an agreement that makes sense for both of us,” Lutnick said.
“The Indian agriculture market has to open up. It can’t just stay closed,” he added. Referring to India’s high tariffs, Lutnick called them among the steepest globally.
Washington wants India to bring tariffs down to zero or negligible in most sectors, except agriculture, under the bilateral trade deal, Reuters has reported.
The United States has a US$45.6bil trade deficit with India.
Overall, the US trade-weighted average tariff rate has been about 2.2%, according to World Trade Organization data, compared with India’s 12%.
Lutnick also asked India to shift defence equipment purchases from Russia to sophisticated US products.
“India has historically bought significant amounts of its military equipment from Russia, and we think that is something that needs to end,” he said.
The United States will increase military sales to India starting this year and eventually provide F-35 fighter jets, Trump announced last month after meeting Modi in Washington. — Reuters
