Strategy being made on Trade Deficit with US – Strategy Being Made on Trade Deficit With Us

Discussion on ‘mutually beneficial’ trade agreement between India and the US is gaining momentum. Meanwhile, India is also considering a strategy to reduce its trade surplus with the US as this matter has been a matter of concern for America for a long time. A person expert in the development told business standard that the Indian government is motivating industry, exporters and importers to assess the possibility of increasing imports from the US. Doing this may reduce India’s trade surplus with the US, which has been one of the major concerns of US President Donald Trump since assuming charge in January. Reducing America’s growing trade deficit is the foundation of Trump’s ‘America first policy’. According to Trump, America’s trade with various countries has been ‘unfair and unbalanced’.

The proposed bilateral trade agreement at Indo-US is to be discussed in Washington later this week. There is a month left for a month to start negotiations on the agreement, so signs of India’s commitment to increase imports and to overcome America’s concern are important. Government officials said that India’s trade deficit is $ 282 billion, so it would not be a major challenge to transfer the source of imports to the US. A government official told business Standard, ‘Reducing trade deficit can be one of the results of bilateral trade agreement. The two countries aim to increase bilateral trade by $ 500 billion by 2030, resulting in an increase in exports.

India’s trade surplus with the US increased to $ 41 billion in FY 2025, which was $ 35 billion last year. Trade surplus has increased at a time when Trump -led administration in the US has imposed a fee on several countries to reduce its about $ 100 billion trade deficit. Another way to solve the issue of trade surplus may also be to send goods exported from India to other markets other than the US. This may reduce the risk of exporters, given the rapidly changing geopolitical landscape and uncertainties associated with it.

An industry official said that according to the new regulations issued by the US earlier this month, the import duty would only apply to the ‘non-American’ content of the product. It is seen as an encouragement to import more than the US. The official said that this means that the import duty will be prepared on the basis of how much American content (component in the US) is engaged in the finished product. This can be good for areas such as plastic, where polymers can be imported from the US.

First Published – April 20, 2025 | 10:23 pm IST