Last week, India has further reduced import duties on motorcycles, reducing prices on heavy goods vehicles with engines greater than 1,600 cc, from 50% to 30% and from 50% to 40% .
A preventive decision designed to further smooth the entry of Harley Davidsons into India – and, Delhi’s hope, repel any threat of prices. Exports of American motorcycles to India were worth $ 3 million last year.
Donald Trump marked his return to the White House by brandishing trade measures against the American neighbors and allies as well as his great rival China.
Will India hopes that it is ahead of the game-but will its price cuts satisfy Trump, or is commercial action still on the table?
“Canada and Mexico are literally two arms from the United States. If it acted against them, it could easily act against India,” said Ajay Srivastava, founder of the Think Tank Global Research Institute (GTRI), based in Delhi,.
In their telephone conversation at the end of last month, the American president pressed Prime Minister Narendra Modi to buy more American weapons and so that there is a more equitable commercial balance, keeping the pressure.
And during his first mandate, Trump set the steep rates of India. He has repeatedly criticized the 100% duty on Harley as “unacceptable”, making it a rallying point in his crusade against what he considered to be unjust commercial practices.
In the past, he has repeatedly marked India a “pricing king” and a “great attacker” of commercial ties.
India has a trade surplus with the United States, its best trading partner. Bilateral trade has crossed $ 190 billion (150 billion pounds sterling) in 2023. Exports of goods to us increased by $ 123 billion since 2018, while the services have increased by 22% for reach $ 66 billion. Meanwhile, American exports to India amounted to $ 70 billion.
But beyond the bikes, India has canceled import taxes on satellite field installations, benefiting American exporters who provided $ 92 million in 2023.
Synthetic aroma prices rose from 100% to 20% ($ 21 million in US exports last year), while tasks on fish hydrolyzo for aquatic food has gone from 15% to 5% ($ 35 million in American exports in 2024). India also removed prices on certain waste and scrap items, a category where US exports amounted to $ 2.5 billion last year.
The best American exports to India in 2023 included crude oil and petroleum products ($ 14 billion), LNG, coal, medical devices, scientific instruments, scrap metals, turbojets, computers and almonds.
“While Trump criticized India’s pricing policies, the latest reductions report a change in policy that could improve American exports in various sectors,” said Srivastava.
“With key tariff reductions on technology, cars, industrial imports and waste, India seems to take measures to facilitate trade, even if the global commercial environment remains tense.”
Meanwhile, India exports extend to a diversified range – textiles, pharmaceutical products and engineering products with oil oils, machines and cut diamonds. He also ships smartphones, car parts, shrimp, gold jewelry, shoes and iron and steel, making it a key player in world trade.
“This diversified range of products reflects the broad export base of India and its solid commercial relationship with the United States,” said Srivastava.
India was once among the most protectionist economies in the world. In the 1970s, the American political scientist Joseph Grieco described it as having one of the “most restrictive and bulky regimes regulating foreign direct investments”.
This inner appearance approach led to a constant drop in India’s export share of world trade, from 2.42% in 1948 to only 0.51% by 1991. As a Sinha, Author of Globalizing India: how the global rules and markets shape the rise of India in power of India, observed, this period was marked by “an autonomous industrialization reader, export pessimism and export and export pessimism and export pessimism and export pessimism and export pessimism and export pessimism the suspicion of global alliances “.
India finally opened in the 1990s and 2000s, reducing average rates from 80% in 1990 to 13% in 2008.
But after modification launched its “make in india” policy aimed at stimulating manufacturing in India the prices increased again to around 18% – higher than those set by other Asian nations such as China, Korea of the South, Indonesia and Thailand.
The business expert Biswajit Dhar thinks that India is now a main target in Trump’s “America First” policy, who is looking for reciprocal action against high import taxes and re -evaluates trade with large American deficits.
Access to the agricultural market remains a point of collision for the United States, he says.
India has abandoned reprisal rates on American manufacturing almonds, apples, chickpeas, lenses and nuts in 2023, but Trump will probably demand more. However, India can be firmly due to internal political sensitivity around agriculture.
“This is where we will take a good deal and problems could arise,” warns Mr. Dhar.
That said, India’s strategic links with the United States – as a quadruptor against China – could help alleviate friction. India’s desire to accept the expulsion of undenial migrants without papers in the United States without postponing also sent a positive signal, notes Mr. Dhar.
Experts also highlight Modi’s warm relationships with Trump as an advantage. A certain clarity comes when the Indian Prime Minister visit the White House – this month, according to some reports – during the invitation of Trump.
