Trump’s comments came just hours after he announced reciprocal tariffs that could take effect against US trading partners, including India, as soon as April. Trump cast his decision as one he was forced to take after efforts to convince India to reduce import taxes had failed.
“It’s very hard to sell into India because they have trade barriersvery strong tariffs,” said Trump.Also Read: From AI to quantum computing, all the high-tech handshakes between Modi and Trump
While Trump hailed the agreement between him and Modi to launch “negotiations to address the long-running disparities” in the trading relationship, details on actual deals were sparse.
Trump touted plans to boost energy sales — including oil and gas — and defense technology exports by “many billions of dollars” as steps he hoped would slash the overall trade deficit. He also said the US would take steps to ultimately provide India with sales of F-35 fighters.
Modi’s pledges were also muted, with the Indian leader focused on growing overall trade between the countries, with a goal of doubling bilateral trade to $500 billion by 2030.
Modi said India sought to expand work with the US in artificial intelligence and semiconductors — two rapidly developing industries Trump has identified as priorities for his administration — and was interested in strengthening supply chains, including for pharmaceuticals.
Also Read: Trump offers F35 fighter jets and asks Modi to reduce tariffs on US cars
“I think our relationship is the best it’s ever been,” Trump said. But even as the two leaders referenced the warm ties they have enjoyed in the past — and Modi extended an invitation for Trump to visit India — their talks were overshadowed by the move to implement reciprocal tariffs.
The tariffs, which could be complete by April 1, would be customized for each country, offsetting not just their own levies, but also non-tariff barriers such as unfair subsidies, regulations, value-added taxes and other factors. Sweeping reciprocal tariffs threaten to have a significant impact on India.
Senior administration officials, who briefed reporters ahead of the meeting on condition of anonymity, said Trump and Modi would seek to lay the groundwork for some form of a trade pact between the two economies with the aim of having it in place this year, and cast efforts to have India purchase more US defense and energy exports as steps to address what Trump has cast as an imbalanced trade relationship between the two democracies.
Modi has sought to shift the country’s reliance on coal as a source of power, creating an opening for liquefied natural gas exports from the US. Yet pipeline constraints in India have curtailed ambitions by Modi as well as top gas producers to bring more US LNG to the country.
Modi and Trump last met five years ago when the Indian leader threw an extravaganza for the US president before a crowd of 100,000 people. Thursday’s visit was a test of whether the head of the world’s most populous nation can ease US worries about trade and protect market access to his country’s largest trading partner.
Modi’s visit also comes at a critical time for India’s markets, with the prime minister facing tougher challenges in his bid to pitch the country as an attractive investment destination. Foreigners have pulled $21 billion from Indian shares since the end of September, the rupee has hit fresh lows, and India’s $4.1 trillion stock market is Asia’s worst performer this year among the region’s major economies.
A trade war with the US threatens to magnify that damage. The nation’s overall trade deficit is $78.1 billion — driven largely by energy imports — and it’s cushioned by a bilateral surplus with the US worth $35.3 billion in the fiscal year that ended last March.
Ahead of his meeting with Trump, Modi has moved quickly to try and assuage Trump’s concerns with numerous concessions, including cuts to duties on items including textiles, motorcycles and luxury cars. And India has pledged to accept flights of deported migrants, a top priority for Trump who is carrying out a crackdown on illegal migration; buy more US energy; and maintain the dollar as its trading currency.
One of the US officials said the moves are modest but have been well-received.
Modi on Thursday also said he supported Trump’s efforts to broker an end to Russia’s war in Ukraine, moves that blindsided European allies and marked a sharp shift in US policy toward the conflict.
Another source of tension between the two countries is the US allegations of bribery leveled against Indian billionaire Gautam Adani, a close associate of Modi’s. Adani is the founder of the Adani Group and Asia’s second richest man. The Adani Group has denied the US allegations.
While the DOJ brought the charges under former President Joe Biden, Trump will be able to decide how aggressively prosecutors pursue the case. Modi, asked if he had raised the case during their talks, sidestepped the question, saying that he was protective of all Indian citizens while also indicating that such personal matters could be inappropriate for a leader-to- leader discussion.
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