Donald Trump and Indian Prime Minister Modi Announce Landmark Deals on Trade, Energy, and AI

U.S. President Donald Trump criticized India for having the highest tariffs among all nations. He emphasized that his proposed reciprocal tariffs are designed to promote fairness and create a more balanced trade environment. Trump’s nominee for Commerce Secretary confirmed that trade issues with each country would be addressed individually.

Trump Criticizes India's Tariffs, Calls for Reciprocity

Speaking at the White House, Trump suggested that other countries should either reduce or eliminate their tariffs. He also warned that sending products through third-party countries to bypass tariffs would not be tolerated. Additionally, Trump indicated that value-added tax (VAT) systems would be factored in when assessing tariffs.

Modi's Diplomatic Outreach Amid Political Wins

Indian Prime Minister Narendra Modi, known for his nationalist policies, has maintained a strong rapport with Trump since his first term. Modi has highlighted his relationship with the U.S. leader while expressing optimism about strengthening ties with Washington. His visit comes at a crucial time, following a major electoral victory for his ruling Hindu nationalist party in a key state legislature election.

Ahead of his trip to Washington, Modi stated that the visit would provide an opportunity to deepen cooperation in technology, trade, defense, and energy. However, discussions at the White House are expected to include difficult negotiations as well.

U.S. Expands Tariffs as Trade Talks Continue

Trump has already imposed tariffs on China and has signaled potential increases against the European Union, Canada, and Mexico. On Thursday, he announced new tariff hikes to match the tax rates imposed by other nations, proclaiming on social media, “TODAY IS THE BIG ONE: RECIPROCAL TARIFFS!!!”

The U.S. president has often referred to India as the “tariff king.” In response, India has taken steps to ease trade tensions, such as increasing its imports of American oil and reducing tariffs on select U.S. goods. For example, tariffs on some Harley-Davidson motorcycles were lowered from 50% to 40%. Additionally, in 2023, India lifted retaliatory tariffs on various American agricultural products, including almonds, apples, lentils, chickpeas, and walnuts.

Defense and Technology Cooperation Strengthens

The two nations have also signed significant defense agreements. A recent deal allows U.S.-based General Electric to collaborate with India’s Hindustan Aeronautics to manufacture jet engines domestically. Additionally, India has agreed to purchase U.S.-made MQ-9B SeaGuardian drones.

Despite these developments, Trump remains focused on reducing trade deficits. The U.S. currently has a $50 billion trade deficit with India, even though India is America’s largest trading partner. In 2023, bilateral trade in goods and services totaled approximately $190.1 billion, with U.S. exports to India reaching nearly $70 billion and imports from India amounting to $120 billion.

Future Trade Agreements in the Works

A senior Trump administration official, speaking anonymously, acknowledged that India has made positive moves on trade. The official stated that both nations aim to finalize a fair trade agreement by the end of the year.

High-Profile Meetings and Immigration Talks

During his visit, Modi met with U.S. National Security Adviser Mike Waltz and held separate meetings with billionaire entrepreneur Elon Musk and former Republican presidential candidate Vivek Ramaswamy. Modi’s discussions with Musk, attended by some of Musk’s children and executive Shivon Zilis, focused on technology and business collaboration.

In addition to trade and technology, immigration was another key topic of discussion. Modi highlighted India’s cooperation with the U.S. on immigration issues, including accepting the return of 104 migrants deported on a U.S. military flight—the first such repatriation under Trump’s immigration crackdown.

India’s Role in U.S. Indo-Pacific Strategy

For the Trump administration, India plays a strategic role in countering China’s influence in the Indo-Pacific region. As part of this strategy, India will be hosting a summit later this year for the Quad alliance, which includes the U.S., India, Japan, and Australia.

With trade, energy, defense, and artificial intelligence at the forefront, Trump and Modi’s meeting signals a new phase of cooperation between the two global powers.