Modi-Trump summit: Prime Minister Narendra Modi’s first visit to the US after President Donald Trump assuming office for the second time marked a significant moment in India-US relations. The Washington visit led to a series of announcements spanning trade, defence, energy, technology, and global security, signalling a promising partnership moving forward. While the visit was undoubtedly strong in optics, several challenges remain unresolved, posing hurdles to a thriving bilateral relationship.
Modi’s meeting with President Trump highlights the Trump administration’s intent to strengthen ties with New Delhi. However, Trump’s unpredictable foreign policy has often unsettled traditional allies and trading partners, making this meeting particularly significant for India. With high stakes, India had to negotiate multiple complex issues to ensure a productive outcome.
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Trade dominates Modi-Trump summit talks
Trade remained a focal point during the Modi-Trump discussions, given American concerns over Indian tariffs. The Trump administration had been considering imposing reciprocal tariffs on multiple trading partners, including India, which was singled out as “at the top of the pack” in terms of tariff impositions.
To address these concerns, India announced significant tariff reductions in its annual budget, cutting average tariffs from 13% to 11% and peak import tariffs from 150% to 70%. Additionally, India reduced import duties on high-end motorcycles and bourbon whiskey, a move that benefits American brands like Harley-Davidson and Suntory’s Jim Beam.
In response, the US government agreed to negotiate the first tranche of a “mutually beneficial, multi-sector” Bilateral Trade Agreement by the fall of 2025. Another significant development was the Mission 500 agreement, under which both countries committed to more than doubling total bilateral trade to $500 billion by 2030. This goal is set to be achieved by increasing industrial goods imports into India and promoting labour-intensive manufacturing exports to the US.
Looming threat of new US tariffs
The trade relations are set to become even more challenging, with President Trump announcing plans to impose a 25% tariff on automobile, pharmaceutical, and semiconductor imports by April 2. This latest move, part of a series of trade measures, could disrupt commerce globally, including with India.
Industry insiders in India have raised concerns, particularly regarding the pharmaceutical sector. India supplies 47% of the US’ generic medicines, making it the largest source of affordable pharmaceuticals. Executives warn that these tariffs could backfire on the US by exacerbating drug shortages and increasing the cost of medicines, as companies may be forced to shift production to the US.
The impact on India’s automobile exports to the US is expected to be minimal, given the country’s relatively small volume of vehicle exports. However, component manufacturers are adopting a wait-and-watch approach as the situation unfolds.
During the Modi-Trump summit, the US president emphasised that these tariffs could rise substantially over the course of a year but noted that companies would have time to relocate their operations to the US before the tariffs are enforced. “When they come into the United States and they have their plant or factory here, there is no tariff. So we want to give them a little bit of a chance,” he said.
Defence and technology cooperation
On the defence front, the two nations discussed a new 10-year framework for the US-India major defence partnership in the 21st Century. The United States is set to expand its defence exports to India, including Javelin missiles, Stryker armoured vehicles, and additional P8i maritime patrol aircraft. Talks are also underway regarding the potential sale of advanced F-35 stealth fighters.
Another significant development during the Modi-Trump summit was the launch of the Autonomous Systems Industry Alliance, aimed at fostering joint development of maritime and counter-drone technologies. Both countries committed to streamlining military trade by reviewing arms regulations and initiating reciprocal procurement negotiations. Additionally, Washington expressed its intention to build US-designed nuclear reactors in India, incorporating large-scale localisation and possible technology transfers.
A major highlight of the visit was the launch of the US-India TRUST (Transforming the Relationship Utilising Strategic Technology) initiative, which seeks to bolster bilateral cooperation in critical and emerging technologies. The INDUS Innovation program was also introduced to foster partnerships and drive investments in space, energy, and other cutting-edge sectors. Both nations further committed to finalising a US-India Roadmap on Accelerating AI Infrastructure by the end of the year.
While the visit set the stage for a US-India partnership, the omissions from the joint statement highlight significant unresolved challenges.
The H-1B visa conundrum
One of the key disappointments from the Modi-Trump summit was the absence of any concrete announcement regarding H-1B visas for skilled professionals. The joint statement included only a vague reference to the talent flow and movement of students, researchers, and employees which has mutually benefited both countries. Given that India accounts for 75% of all H-1B visas issued in 2020, the Trump administration’s inconsistent stance on legal migration remains a source of concern for Indian professionals and businesses.
Additionally, India reiterated its position on repatriating immigrants who have entered the US illegally. However, there was no indication that India raised concerns over the mistreatment of Indian immigrants, which has sparked domestic uproar.
Bilateral trade agreement
While the commitment to negotiate a BTA is significant, its implementation will take time, and its success remains uncertain. A fundamental incompatibility exists between Trump’s America First policy and Modi’s Make in India initiative. Whether these competing priorities can be reconciled remains an open question.
India also failed to secure exemptions from recently raised US tariffs on steel and aluminium imports, despite extensive negotiations. With the impending 25% tariff on automobile, pharmaceutical, and semiconductor imports, India’s ability to mitigate adverse trade impacts remains a major concern.
Given the Trump administration’s efforts to downplay climate change and its withdrawal from the Paris Agreement, it was unsurprising that clean energy was absent from the agenda. However, for a country as vulnerable to climate change as India, securing commitments on clean energy cooperation should have been a higher priority. If India wishes to demonstrate its diplomatic strength and friendship with Washington, it must push for more robust clean energy collaborations in future negotiations.
The Modi-Trump summit has undoubtedly set a positive tone for India-US relations, reinforcing mutual interests and deepening economic and strategic ties. However, significant challenges remain. While the meeting successfully highlighted areas of agreement, the long-term health of the bilateral relationship will depend on sustained efforts to address existing divergences. Trade imbalances, migration policies, defence cooperation, and climate commitments require continued engagement to ensure that the India-US partnership reaches its full potential.