The only constant in life is change, or so believed the ancient Greek philosopher Heraclitus. That abiding philosophy now well defines India-US relations as witnessed by a flurry of activities in the first half of February. Firstly, illegal Indian immigrants to the US were for the first time handcuffed and sent on military flights back to India, a phenomenon hitherto unheard of or unseen. While such deportations have taken place in the past, the scale and publicity of the current action by the US administration is unparalleled. Secondly, US authorities have agreed to extradite Tahawwur Rana—a former military doctor who served in the Pakistan Army—who is wanted by Indian probe agencies for his role in the 26/11 Mumbai terror attacks. Once again, the extradition will follow years of inaction by previous administrations.

Thirdly, and perhaps most importantly, it is about trade. When Indian Prime Minister Narendra Modi and US President Donald Trump addressed a joint press conference at the White House, it was the latter who minced no words. “India imposes a 30, 40, 60 and even 70 per cent tariff on so many goods, and in some cases, far more than that. As an example, a 70 per cent tariff on US cars going into India makes it pretty much impossible to sell those cars. Today, the US trade deficit with India is almost $100 billion, and Prime Minister Modi and I have agreed that we will be negotiating to address the long-running disparities,” he said. As of now, India levies an average weighted tariff of 9.5 per cent on US exports, significantly higher than the 3 per cent tariff the Americans apply to Indian goods. Mr Trump even described India as a hard place to do business.

Things are being sorted out, though. According to Nomura, a global financial services company, India is already considering reducing tariffs on over 30 US items. Also, as a preemptive strategy, it plans to increase purchase of defence and energy products in order to stop the US from applying higher reciprocal tariffs. In its recent Budget, India reduced import duties on a range of US products including electronics, textiles and high-end motorcycles. It is also considering reducing tariffs on US luxury vehicles, solar cells and chemicals.

There is a considerable trade gap. According to the India Brand Equity Foundation, in FY 2024, bilateral trade between India and the US stood at US$ 118.2 billion, making the US our largest trade partner. Of this, Indian exports to the US stood at US$ 77.5 billion, while American exports to India stood at US$ 40.7 billion indicating that India has a trade surplus of US$ 36.8 billion. In FY 24, while India exported 7,346 commodities, our country imported 5,749 commodities from the US. Major exported items from India to US included engineering goods (US$ 17.6 billion), electronic goods (US$ 10.0 billion), gems and jewellery (US$ 9.90 billion), drug formulations and biologicals (US$ 8.72 billion), petroleum products (US$ 5.83 billion)), and RMG cotton including accessories (US$ 4.71 billion). India’s major imports from the US during this period included mineral fuels and oils (US$ 12.9 billion), followed by pearls, precious, and semi-precious stones (US$ 5.16 billion), nuclear reactors, boilers and machinery (US$ 3.75 billion), electrical machinery etc. (US$ 2.38 billion) in FY24. According to the Office of the US Trade Representative that works directly under the President of the USA, the trade deficit with India stood at US$ 45.7 billion in CY 2024. Clearly, the US has some catching up to do.

On a lighter vein, PM Modi spoke about creating MEGA prosperity for the two nations, playing on MAGA (Make America Great Again, the US President’s election slogan) and MIGA (Make India Great Again based on Viksit Bharat). Our cover story focuses on the PM’s recent visit to that country.

Elsewhere in the magazine there are many other stories of interest. There is a report on the AI Action Summit in Paris that witnessed a convergence of some of the best and brightest minds in the world. A 118-member foreign delegation including diplomats and heads of missions from 77 countries took a sacred dip at Triveni Sangam, Prayagraj. A Russian delegation called on Indian President Droupadi Murmu and a new BAPS Shri Swaminarayan Hindu Mandir and Cultural Complex in Northriding, Johannesburg has just opened its doors to devotees. Catch all of this and much more in this latest issue.

Sayantan Chakravarty
sayantanc@gmail.com