An ambitious trade deal with India is in our grasp
As financial markets are weighed down by new tariffs, and boardrooms debate hitting pause on investment plans, American workers, farmers and businesses face a moment of uncertainty.
However, the surest way to spur growth and opportunity is through new trade deals – not trade wars. And nowhere is the opportunity greater – or more elusive – than with India.
I recently returned from meetings with Indian officials and business leaders in Delhi and Mumbai, and I was struck by the optimism among Indian CEOs about the future of the trading relationship between our countries. There is good reason for it.
Trump administration trade officials were there at the same time, meeting with the Indian government on its proposal for a new bilateral trade agreement. The proposal is aimed at achieving $500 billion in two-way trade by 2030, a bold goal agreed to by President Donald Trump and Prime Minister Narendra Modi in their February meeting at the White House.
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Inking this deal is a golden opportunity for President Trump, and even more so for American businesses and workers. The U.S.-India economic relationship is among the most consequential in the world. Our economies are deeply intertwined in sectors ranging from technology to energy to agriculture, and the potential for export growth is massive. India’s economy is projected to expand from $4 trillion today to as large as $35 trillion by mid-century.
The security implications are enormous, too. India’s strategic perch in the Indo-Pacific makes it a powerful alternative to China. One Indian leader shared with me that all of his country’s free-trade agreements are to the east, and they are eager to have one to the west. America should be eager, too, for economic and national security reasons alike. A free trade deal would be a boon to efforts by both sides to enhance our defense production, enhance deterrence and increase interoperability of our armed forces.
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President Trump enjoys a warm relationship with Prime Minister Modi, and their relationship will greatly help both sides negotiate a historic trade agreement that unleashes the power of our free markets.
India imposes tariffs that average 10% higher than those the U.S. levies on Indian goods. The negotiators on both sides have already made progress toward rectifying this imbalance, with Trump declaring this week that India will drop its tariffs significantly. India also dropped its 6% digital services tax, a long-standing issue for American companies of all sizes and sectors that engage in digital trade.
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These are strong indicators of progress, but the record of past U.S. trade agreements promises even more. While America’s 20 trade agreement partners represent less than 10% of the world’s GDP outside the United States, in recent years they have purchased nearly half of all U.S. exports. On a per capita basis, these countries purchase 14 times more U.S.-made goods and services than other countries.
The United States desperately needs more of these deals. It has been 13 years since the United States entered into a comprehensive trade agreement with a new partner, while others like the EU and Japan have been racing ahead with new agreements at a record pace. With its tariffs now in place, negotiating new agreements should be the administration’s overriding focus.
Alternatively, if a deal is not reached and the administration continues its tariff onslaught, the risks to America’s economy and security would be severe. In this moment of geopolitical change, the last thing we need to do is incentivize our allies and partners to enter into new trade pacts with our strategic competitors.
A new trade agreement with India is the first of many opportunities President Trump has to build on a strong personal relationship to take a burgeoning commercial partnership to the next level. India is proof that our trusted partners are willing to make concessions and drive a deal. For the sake of American businesses and workers, America needs to lean in and take the win.