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    EYE ON INDIA                                                              MAY 29, 2026     |  The Indian Eye                    8

                      India-US Trade Momentum Grows, but

            Tariff Pressures Still Shadow the Partnership

             Fresh investment promises and a looming trade pact highlight the deepening India-US economic

                relationship, even as tariff disputes and strategic calculations continue to shape negotiations.

            OUR BUREAU                                                                                                The proposed interim trade
                                                                                                                  agreement  under  negotiation  is  ex-
            New Delhi
                                                                                                                  pected to become a crucial step-
                  he India-United States eco-                                                                     ping stone toward that goal. Gor
                  nomic partnership appears                                                                       expressed  confidence  that  the  deal
            Tto be entering a new phase of                                                                        could be finalised “over the next few
            acceleration, driven by shifting global                                                               weeks  or  next  few  months.”  Indian
            supply chains, rising geopolitical un-                                                                Commerce Minister Piyush Goyal
            certainty and a renewed push for bi-                                                                  confirmed  that  a  US  delegation  is
            lateral trade integration. Statements                                                                 expected in India next month for fur-
            by United States Ambassador to In-                                                                    ther negotiations.
            dia Sergio Gor this week underscored                                                                      However,  the  optimism  sur-
            Washington’s  growing  confidence  in                                                                 rounding the trade deal masks per-
            India as both a manufacturing destina-                                                                sistent structural tensions.
            tion and a strategic economic partner.                                                                    The Trump administration’s eco-
                Yet beneath the optimism sur-                                                                     nomic worldview remains fundamen-
            rounding investment flows and trade                                                                   tally protectionist despite its strategic
            negotiations lies a more complicated                                                                  embrace of India. Gor himself de-
            reality: the relationship continues to                                                                scribed Trump’s goal as facilitating
            be shaped by protectionist pressures,                                                                 trade in a way that creates “lucrative
            tariff disputes and the transactional                                                                 opportunities for American business-
            economic philosophy associated with                                                                   es  and workers.”  That  formulation
            US President Donald Trump.                                                                            reveals the transactional foundation
                Addressing the Annual Leader-                                                                     of current US trade policy.
            ship Summit of the American Cham-  Union Minister for Finance & Corporate Affairs Nirmala Sitharaman meets US Ambassador to   For India, this creates a deli-
            ber of Commerce in India in New          India Sergio Gor, in New Delhi on Wednesday. (@FinMinIndia X/ANI Photo)  cate balancing act. New Delhi seeks
            Delhi, Gor described a remarkable                                                                     closer integration with the Ameri-
            rise  in  interest among  American   ufacturing  geography  as a  strategic   At the same time, the economic   can economy while simultaneously
            corporations seeking to relocate op-  vulnerability. India, with its large do-  relationship is no longer one-sided.   protecting its own manufacturing
            erations or diversify supply chains   mestic market, expanding infrastruc-  Gor highlighted that Indian compa-  sector and strategic autonomy. India
            toward India.                     ture and geopolitical alignment with   nies had committed more than USD   remains cautious about opening sen-
                “Every single week, CEOs from   Washington, has  emerged as  a key   20 billion in investments in the Unit-  sitive sectors too quickly or appear-
            the United States come to the em-  alternative.                     ed States during the recent Select In-  ing excessively dependent on any one
            bassy and say, I want to move my      Gor  directly  acknowledged  this   vestment Summit. Calling the figure   economic partner.
            company from another country to   geopolitical dimension when he stat-  “an incredible achievement,” he not-  The trade negotiations therefore
            India,”  the  envoy  said,  highlighting   ed, “Simply put, the United States,   ed that embassies globally compete   represent more than tariff bargain-
            what he  portrayed  as  a  structural   under President Trump, trusts India.”  to  attract  investments  into  the  US,   ing; they are part of a wider attempt
            shift rather than a temporary trend.  That trust is becoming central   and India ranked first.        to  redefine  the  economic  architec-
                The symbolism of major corpo-  to  Washington’s  Indo-Pacific  eco-  This growing two-way invest-  ture of the India-US relationship.
            rate leaders visiting India simulta-  nomic strategy. Unlike earlier phases   ment pattern demonstrates the ma-  The broader geopolitical context
            neously  was  significant.  According   of India-US relations that focused   turity of the bilateral relationship.   also  matters.  US Secretary  of  State
            to Gor, top executives from compa-  primarily on defence and strategic   Indian  firms  are  no  longer  mere-  Marco Rubio is expected to visit In-
            nies such as Uber, Walmart, Boeing,   convergence, the  current  moment   ly  outsourcing  partners  or  service   dia shortly, signalling Washington’s
            Lockheed Martin and GE Aero-      is increasingly about industrial inte-  providers; many are now major in-  desire to deepen cooperation not
            space were either already in India or   gration, technology partnerships and   vestors, employers and technology   only in trade but also in defence, en-
            scheduled to visit this week. “They’re   supply-chain resilience.   contributors  within  the American   ergy and regional security.
            here, they’re not in other parts of the   India’s  role  in sectors such  as   economy itself.            For  India, closer  economic ties
            world,” he noted.                 semiconductors, electronics, phar-    Trade  figures  also  reflect  the   with the US provide access to tech-
                The  comments  reflect  a  broad-  maceuticals, aerospace and clean en-  scale of the transformation. Bilateral   nology, capital and markets at a time
            er  global  reconfiguration  of  supply   ergy is expanding. The Modi govern-  trade between the two countries has   when the global economy is frag-
            chains that accelerated after the   ment’s  production-linked  incentive   grown from roughly USD 20 billion   menting into competing strategic
            COVID-19 pandemic and deepened    schemes and manufacturing push    two decades ago to over USD 220   blocs. For Washington, India offers
            amid worsening US-China tensions.   have strengthened New Delhi’s ef-  billion today. Both governments are   scale, democratic legitimacy and  a
            American  firms  increasingly  view   fort to position India as a global pro-  now targeting USD 500 billion in bi-  long-term counterweight to China’s
            overdependence on a single man-   duction hub.                      lateral trade by 2030.            manufacturing dominance.

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