India draws up plan to reduce over $40 billion trade surplus with US

India is exploring strategies to reduce its over $40 billion trade surplus with the United States to fast-track the proposed bilateral trade deal. This trade surplus is a key concern for the Donald Trump administration.

- BY S VENKAT NARAYAN OUR SPECIAL CORRESPONDENT

According to a source familiar with the matter, the Indian government is encouraging industry stakeholders, including exporters and importers, to evaluate opportunities for increasing imports from the US, the Business Standard newspaper reported today.

Narrowing America’s mounting trade deficit has been the cornerstone of Trump’s sweeping country-specific reciprocal tariffs, which he later paused for 90 days until July 9.

Based on the formula used by the United States Trade Representative office, India’s shipments to the US are supposed to face an additional tariff of 26 per cent.

With talks on the proposed India-US Bilateral Trade Agreement (BTA) scheduled to take place in Washington later this week, and formal negotiations expected to begin within a month, a calibrated increase in imports from the US is seen as a crucial signal behind India’s willingness to address Washington’s concerns.

A team of commerce department officials headed by chief negotiator and commerce secretary-designate Rajesh Agarwal will hold discussions for three days with his counterpart in Washington, beginning April 23.