 "Tariffs, trade and defence: What’s on the agenda as Modi meets Trump?")
Prime Minister Narendra Modi was among the first few leaders to congratulate and speak with his “friend” Donald Trump after his historic win in the US presidential election. Now the Indian leader is among the first select few foreign leaders visiting Washington DC for a bilateral.
After a productive visit to France, the PM headed to the US capital on the evening of February 12 (Tuesday) and will hold talks with Potus on February 13 (Wednesday). This is Modi’s first bilateral with Trump during his second term, which began on January 20 . And it is probably the most important one.
Since assuming office, Trump has triggered uncertainty with his plans to impose tariffs and the crackdown on immigration. India has a lot at stake.
We look at what Trump and Modi are likely to talk about and its possible impact.
Trade and tariffs
Economic cooperation will be a top priority because of Trump’s tariff threats.
The United States is India’s largest trading partner with two-way trade reaching $118 billion in 2023-2024. However, India’s surplus stood at $45.6 billion in 2024, according to US data. It is not something Trump is pleased about. The US president has described India as a “tariff king” and “abuser” of tariffs in the past.
Trump has imposed tariffs on China, Canada and Mexico (there’s a month’s pause on his neighbours), and before meeting the PM he said he would announce reciprocal tariffs today. Earlier, he announced 25 per cent tariffs on aluminium and steel imports with “no exemptions, no exceptions”. This too impact India and there are concerns over the dumping of steel in the country.
Trump’s top economic adviser Kevin Hassett said on Monday that India has high tariffs that lock out imports and Modi would have a lot to discuss with Trump when the two leaders meet.
New Delhi is already doing the balancing act. Union Finance Minister Nirmala Sitharaman has slashed import duties on high-end motorcycles and electric batters in the Union Budget 2025. Modi is likely to emphasise this during his discussions with Trump. It might not be enough.
The US president has used tariffs to negotiate better deals. He has first imposed them and then given some concessions. The challenge for PM Modi will be to avoid this pattern. Officials told the Economic Times that New Delhi is ready to negotiate to phase out some tariffs imposed on US goods in 2019 in response to Trump’s trade action then. While eight items have been removed from the list, 20 incur heavy duties.
The US administration is keen to reduce the US trade deficit with India and is hoping to have a fair bilateral trade deal with New Delhi in place in 2025, Trump administration officials said ahead of the meeting.
A trade pact was in the making during President Trump’s first term but was not finalised. During the Biden administration, there were no talks on such a deal.
“The Biden administration did not pursue a trade deal with India, so it would be a significant development if Trump and Modi were to move forward on negotiations for one now,” writes Srujan Palkar, a Global India fellow and an assistant director at the Atlantic Council’s Scowcroft Middle East Security Initiative.
Defence
In a phone call with PM Modi last month, Trump called on India to expand its acquisition of US military technology, including fighter jets, drones and armoured vehicles. Washington is reportedly keen on selling F-35 jets, even as the Asian nation has been buying France’s Rafale to strengthen its military.
New Delhi is also interested in reviving the procurement of six more advanced P-8I long-range maritime patrol and submarine-halting aircraft from the US, which was paused three years ago, reports The Times of India. An increase in defence imports can help in tariff negotiations.
#WATCH | Bengaluru | US F-35 fighter aircraft performs manoeuvres at #AeroIndia2025 - the 15th edition of Asia's top aerospace exhibition pic.twitter.com/bVdtWJdm2t
— ANI (@ANI) February 10, 2025
Modi and Trump are also likely to discuss the procurement of other advanced defence equipment like drones, military transport aircraft and enhanced joint military exercises.
India is negotiating with the US for the purchase and co-production of combat vehicles and finalising a fighter jet engine deal, sources told Reuters. Discussions include acquiring Stryker combat vehicles from General Dynamics, with plans for co-production through a state-run firm.
India and the US are likely to announce a new defence framework, The Indian Express reported quoting sources.
Immigration and visas
Donald Trump has been cracking down on illegal immigrants and Indians are no exception. The first batch of 104 was deported to India last week and their ill-treatment created a furore back home. While New Delhi has raised concerns over this, it has also said that it is ready to take back its citizens. At least 487 more Indians are likely to be sent back next.
However, the problem at hand is bigger. There are close to 7.25 lakh illegal immigrants in the US, of which 24,000 are in custody, according to Congress MP Manish Tewari.
While India has not resisted taking back the undocumented immigrants, their treatment – handcuffing and shackling them – hurts the country’s image. It has also become a point of debate between the Opposition and the Indian government.
When our PM @narendramodi meets his American counterpart, President Trump, he must raise the 2Ts which are of immense concern for all Indians.
— Mallikarjun Kharge (@kharge) February 12, 2025
1️⃣Tariffs
A 25% tariff on aluminium and steel imports with “no exemptions, no exceptions” for any country, has serious repercussions… pic.twitter.com/aDSPKJFLii
India is likely to bring up the issue of deportation, asking for better treatment of the deportees during the PM’s visit. Modi will also discuss H-1B visas , important for Indian IT workers, to ensure no changes in this programme.
Energy
Ahead of the US visit, PM Modi met Vice President JD Vance in France on the sidelines of the Paris AI Summit . They spoke about how Washington can help India diversify its energy sourcing through investments in US nuclear technology, said the White House.
Modi and Trump are expected to take these talks forward. Boosting energy cooperation is on the agenda.
The US is likely to push India to buy more oil and gas and reduce its dependence on Russia. Until 2021, America was one of the top exporters of oil to India. However, the Russia-Ukraine war disrupted the oil markets and New Delhi purchased cheaper oil from Putin .
In return, Modi might ask for an American investment in nuclear energy projects. The Indian government earlier this month proposed to amend its nuclear liability law to boost foreign and private investments in the sector.
Foreign Secretary Vikram Misri said that India will discuss cooperation in advanced and small modular nuclear reactors with the US.
Technology, AI and China might also be up for discussion.
A lot is riding on PM’s visit to Washington DC. The discussions are urgent but ironing out irritants and making tangible progress could take a while. For now, what Modi can do is set the groundwork for the next four years.
India can only hope that the bromance between the two leaders , which was much talked about in Trump’s first term, continues to bloom.
With inputs from agencies
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