Indian Prime Minister Narendra Modi is traveling to Washington for crucial discussions aimed at preventing a trade war with Donald Trump. India is contemplating tariff reductions in at least a dozen sectors to avoid US tariffs that could further strain its already slowing economy. The meeting on Wednesday will assess the much-publicized camaraderie between Trump and Modi, characterized by warm embraces and generous praise during Trump’s first term. Trump has described Modi as “the nicest human being,” while Modi has called the president his “dear friend.” Both leaders are populists who gained power through anti-establishment sentiments and nationalism.
Indian Foreign Secretary Vikram Misri stated that Modi’s invitation to visit the US just weeks after the new administration took office underscores the significance of the India-US partnership. Trump has expressed his dissatisfaction with India’s high tariffs, labeling the country a “very big abuser” and accusing it of hindering US imports. Modi’s two-day visit follows Trump’s announcement of a 25% tariff on global steel and aluminum imports, which Trump described as “the first of many,” suggesting potential tariffs on cars, chemicals, pharmaceuticals, and other products. He has proposed a system of “reciprocal tariffs,” stating, “If they charge us, we charge them.”
The metal tariffs have unsettled India’s steel and aluminum sectors, which export goods worth billions to the US annually. The Indian Steel Association indicated that the steel tariff could lead to an 85% reduction in exports to the US. To preempt potential punitive trade measures, the Indian government recently reduced duties on various goods, including high-end motorcycles like Harley-Davidsons, and is considering further tariff cuts on products such as electronics, medical equipment, chemicals, dish antennas, and wood pulp, many of which are sourced from the US.
Bilateral trade has been steadily increasing, exceeding $118 billion in the last financial year, with India enjoying a $32 billion trade surplus. Trump seeks a more “fair” relationship, while India is open to discussing a limited trade agreement to address US concerns regarding market access. Trump has encouraged Modi to purchase more US defense and energy products, as India represents a lucrative market being the world’s largest arms importer. Nuclear energy, including small and modular reactors, is also on the agenda as India aims to enhance its clean energy sources to meet decarbonization goals. Reports suggest India is already negotiating to acquire combat vehicles and finalize a fighter jet engine deal.
Another critical issue is Trump’s focus on illegal immigration. The president claims Modi has assured him that India “will do what’s right” regarding this matter.
