India 'big abuser' of US trade ties, says Trump ahead of meeting PM Modi

Donald Trump, hoping to make a comeback as the US president, criticised India as a "big abuser" of trade while praising PM Modi as a 'fantastic' man at an election campaign in the US

Former US president Donald Trump, who is running for the White House a second time, has called India a “big abuser” of the two countries' trade relationship. He said this at a campaign event where he announced that he will meet with Prime Minister Narendra Modi next week. Trump called PM Modi a “fantastic” man but accused India of imposing heavy tariffs on imports.

Modi is scheduled to visit the United States from September 21 to 23, mainly to attend the Quad leaders' summit on Saturday. The summit will also include leaders from Japan and Australia, and will be hosted by President Joe Biden. India will host the Quad summit next year, when the US will have a new president: Either Trump or his Democratic rival Kamala Harris.

Trump made the remarks while speaking at a campaign event at Flint, Michigan, as it tried to rally support for the November elections. He did not give any details on where he would meet Modi nor any specifics over his concerns about the trade ties.

Trump and Modi have shared a warm relationship. Trump had visited India in 2020, where he was welcomed in a grand ceremony at the opening of Motera stadium in Gujarat, which is the world's largest cricket stadium. A year earlier, Modi visited the US while Trump was in office, where the two leaders shared the stage at the Texas event: "Howdy Modi!"

Data on India-US trade exchanges:

In 2023-24, China became India's largest trading partner, with bilateral trade reaching $118.4 billion and surpassing the United States. Trade between India and the US stood at $118.28 billion in the same period, according to data released in May.

While India recorded a trade deficit with 9 of top 10 trading partners in 2023-24, the US was one of the few nations where it maintained a trade surplus.

In the same period, India’s trade deficit stood at $238.3 billion, recording a decline compared to a year earlier. A rising overall trade deficit is considered harmful to the economy by the experts as it puts pressure on the local currency.

Last week, Dr V Anantha Nageswaran, Chief Economic Adviser to the Indian government, said at an event in Tamil Nadu that India’s import duties are too high. He noted that the average applied tariff for all merchandise products was (in 2021) 8.3 per cent, which is higher compared to countries like China (7.5 per cent) and the US (3.4 per cent). He also highlighted that the average applied tariff for non-agricultural products was 14.9 per cent in India during the same period. The same for the US is 3.1 per cent.

Nageswaran said that this is hurting the cost of imported input materials, hindering India’s goal to become an exporting country.