India’s Moves to Enhance Trade Relations with the U.S. Boosts Markets

India is actively taking measures to improve its trade relationship with the United States by addressing tariff issues and increasing economic cooperation. This initiative comes amid President Donald Trump's vocal criticism of India as a “tariff king.”

One of India's key strategies includes reducing tariffs on U.S. imports. The country has expressed willingness to cut tariffs on over half of the $23 billion worth of goods it imports from the United States. This move is part of ongoing negotiations aimed at reaching an early trade deal between the two nations.

Indian stock markets have reacted well to the strategy, with the Nifty 50 adding 6.30% over the past month of trading, as the Sensex gained 5.76%.

In a bid to further strengthen ties, India plans to substantially increase its energy purchases from the U.S. from $15 billion to $25 billion. This increase is anticipated to support U.S. energy exports and contribute to a balanced trade relationship.

India is also focusing on its defense procurement strategy. The country is looking to expand its purchases of U.S. defense equipment, with aspirations of making the U.S. its principal provider of oil and gas. An offer from President Trump to provide F-35 stealth fighters to India could further solidify defense relations.

Additionally, India is set to remove a 6% tax on digital advertisements by April 1, benefiting major U.S. tech firms such as Google, Meta, and Amazon. This tax removal is expected to attract more investment from these companies.

In terms of other tariff adjustments, India has reduced tariffs on bourbon whisky from 150% to 100%. The recent budget has also lowered basic customs duties on items like luxury cars, solar cells, and machinery, decreasing the peak import tariffs from 150% to 70% and average tariffs below 11%. These reductions are aimed at making the Indian market more attractive for U.S. exporters.

Plans are also underway to abolish the Agriculture Infrastructure Development Cess (AIDC) as trade talks advance, which would make agricultural imports more feasible.

Beyond tariffs, collaboration extends into technology with Starlink partnering with Indian telecom companies, Reliance and Airtel, as they approach regulatory approval from the Indian government. This partnership signifies a push towards greater technology exchange and infrastructure development.

Overall, India's initiatives to lower tariffs and boost trade with the U.S. demonstrate its commitment to fostering a mutually beneficial economic partnership. These actions reflect India's broader strategy to align more closely with U.S. economic interests, potentially averting further tariff-related confrontations.