An image of the US and Pakistan flag. — Anadolu Agency
In response to US President Donald Trump’s announcement to boost trade with Pakistan, Islamabad has proposed a zero-tariff bilateral trade agreement with the Washington, revealed government sources.
“Pakistan is offering to enter into a bilateral agreement with zero tariffs on selected tariff lines, with mutual interests, to expand bilateral trade across multiple sectors,” said a high-level source when asked about the new policy offered to the US.
The development comes after US President Trump brokered a ceasefire between Pakistan and India. In a follow-on post after the ceasefire, Trump lauded the leadership of both countries and said he would be doing ‘a lot of trade’ with both.
The nuclear-armed rivals ended their worst military conflict in nearly three decades with a ceasefire announcement on Saturday. The conflict sparked global concerns that it could spiral into a full-blown war.
The fighting began last Wednesday when India launched strikes against what it described as “terrorist infrastructure” in Pakistan. The Indian strike came after an April 22 attack on tourists in Indian Illegally Occupied Jammu and Kashmir, which killed 26 people.
Pakistan said it had nothing to do with the attack on the tourists, adding that India’s strike was aimed at civilian targets.
Pakistan armed forces launched a large-scale retaliatory military action, named “Operation Bunyan-um-Marsoos” and targeted several Indian military targets across multiple regions.
The strikes, described by officials as “precise and proportionate”, were carried out in response to India’s continued aggression across the Line of Control (Loc) and within Pakistan’s territory, which New Delhi claimed were aimed at “terrorist targets”.
India also offers US trade deal with no tariffs
US President Donald Trump said today that India had offered a trade deal that proposed “no tariffs” for American goods, while expressing his dissatisfaction with Apple’s (AAPL.O) plans to invest in India.
New Delhi is seeking to clinch a trade deal with the US within the 90-day pause announced by Trump on April 9 on tariff hikes for major trading partners.
“It is very hard to sell in India, and they are offering us a deal where basically they are willing to literally charge us no tariffs,” Trump said in a meeting with executives in the Qatari capital Doha.
Reuters has reported that New Delhi has offered to reduce duties to zero on 60% of tariff lines in a first phase of the deal under negotiation with Washington, while offering preferential access to nearly 90% of the merchandise India imports from the US.
India’s equity benchmarks jumped to a seven-month high after Trump’s comment on the deal with India.
The Indian trade ministry did not reply to a mail seeking comments on the proposed deal.
Trump in Doha said he had confronted Apple’s CEO Tim Cook about shifting production to India, as the American company moves to make most of its iPhones sold in the United States at factories in India by the end of 2026, and is speeding up those plans to navigate potentially higher tariffs in China.
“Tim, we treated you very good, we put up with all the plants you built in China for years … we are not interested in you building in India, India can take care of themselves, they are doing very well, we want you to build here”, Trump recalled himself telling Cook, who was not in the Doha meeting.
India’s Prime Minister Narendra Modi has in recent years promoted India as a smartphone manufacturing hub and Apple’s suppliers have ramped up production in the country.
In March, Apple’s main India suppliers Foxconn and Tata shipped nearly $2 billion worth of iPhones to the US, an all-time high, to bypass Trump’s impending tariffs.
The United States is India’s largest trading partner, with bilateral trade totalling some $129 billion in 2024. The trade balance is currently in favour of India, which runs a $45.7 billion surplus with the US.
India’s trade minister Piyush Goyal will lead a trade delegation to the United States starting May 16 to advance trade negotiations, two government officials told Reuters on Tuesday.
India has some of the world’s highest tariffs on imports, and Trump has previously called India a “tariff abuser”
— With additional input from Reuters.
