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NEW DELHI — Prime Minister Narendra Modi’s enduring camaraderie with President Donald Trump is set for scrutiny as the Indian leader embarks on a Washington visit this Wednesday, aiming to sidestep tariffs that have impacted others along with looming threats of additional taxes on imports.

As a pivotal strategic ally of the United States, India has thus far managed to avoid new tariffs, and the two leaders have nurtured a personal relationship. Modi, a nationalist facing criticism over India’s erosion of democratic principles, has welcomed Trump back to the White House, hoping to recalibrate India’s ties with the West amid ongoing tensions regarding Russia’s war on Ukraine.

Nevertheless, Trump has often labeled India as a “tariff king” and has pressured the country on the issue of migrant deportations. In reply, New Delhi has shown a readiness to reduce its own tariffs on U.S. goods, accept the return of Indian citizens, and increase purchases of American oil.

However, with tariff threats on the horizon, the critical question remains regarding the extent to which a strong rapport between the two leaders will influence negotiations and how far India will be willing to compromise to strike a deal.

Modi had fostered a effective working relationship with Trump during the latter’s first term, and the two have the potential to enhance areas of mutual interest while “minimizing points of contention without yielding on central national interests,” as noted by Meera Shankar, India’s former ambassador to the United States.

“Compared to other partners, most have their reciprocal lists prepared from the outset, as it provides leverage during negotiations,” Shankar added, expressing optimism that India will “strike the right balance between assertiveness and adaptability” regarding the tariff issue.

With his ruling Hindu nationalist party freshly victorious in a high-stakes state legislature election last weekend in India’s federal territory, including New Delhi, Modi stated before departing for Washington that the visit presents an “opportunity to build on” the cooperation established during Trump’s first term and to “deepen our partnership” across sectors such as technology, trade, defense, and energy.

During a conversation with Modi in January, Trump emphasized the necessity for India to increase its acquisition of American-made military equipment and to address the trade imbalance. In the previous year, the U.S. imported $50 billion more in goods from India than it exported to the country.

A summary from the White House at that time reflected Trump’s insistence on the importance of India boosting its procurement of American-made security products and progressing towards a fair bilateral trading relationship.

Earlier this month, India accepted the repatriation of 104 migrants who were flown back on a U.S. military aircraft, marking the first such flight to India as part of a crackdown initiated by the Trump administration.

Additionally, Modi’s administration has reduced certain elevated tariffs, including those on some Harley-Davidson motorcycles, cutting them from 50% to 40%. In 2023, India also eliminated retaliatory tariffs on U.S. almonds, apples, chickpeas, lentils, and walnuts.

“We can also anticipate that Modi will propose purchasing additional American (natural) gas to help mitigate the U.S. trade deficit,” commented Lisa Curtis, director of the Indo-Pacific security program at the Center for a New American Security, a Washington-based think tank. “This should provide some relief.”

CHINA RELATIONS

India is viewed as essential to the U.S. strategy aimed at containing China in the Indo-Pacific and is set to host a summit with a coalition known as the Quad — comprising the U.S., India, Japan, and Australia — later this year.

However, should there be a warming of relations between Washington and Beijing under Trump, India may need to reassess its position.

“Trump’s engagement with China could complicate India’s efforts to foster American interests in utilizing India as a counterweight to China, while avoiding becoming a proxy,” stated Happymon Jacob, founder of the New Delhi-based Council for Strategic and Defense Research.

India has made strides with China and agreed in December to seek resolutions for their protracted border disputes in the Himalayas following a military standoff that began with a deadly clash in 2020.

“Even a tactical adjustment between the U.S. and China carries implications for India,” Shankar remarked.

The U.S. stands as India’s largest trading partner, with a $50 billion trade deficit favoring India. The trade between India and the U.S. in goods and services amounted to approximately $190.1 billion in 2023. According to India’s External Affairs Ministry, U.S. exports to India reached nearly $70 billion, while imports stood at $120 billion.

Though India relies on Russia for nearly 60% of its defense supplies, the conflict in Ukraine has heightened concerns over future procurement, prompting New Delhi to explore options with the U.S., Israel, Britain, and others.

A recent agreement will enable U.S.-based General Electric to collaborate with India’s Hindustan Aeronautics on manufacturing jet engines for Indian aircraft domestically, alongside the sale of U.S.-made armed MQ-9B SeaGuardian drones.

Since 2008, India has procured over $20 billion in U.S.-origin defense equipment.

“This could be a domain where we witness synergies with the U.S.,” Shankar mentioned, adding that Trump will likely encourage India to acquire more defense assets.

Raja Mohan, an analyst at the Institute of South Asian Studies in Singapore, stated that Modi’s visit provides a timely opportunity to enhance Indo-U.S. relations.

“India’s diplomatic acumen will be put to the test, so the existing goodwill between Trump and Modi must translate into tangible results,” Mohan concluded.

Modi and Trump’s Relationship Faces Challenges During US Visit | The Arkansas Democrat-Gazette

FILE – Indian police officials escort immigrants, wearing masks, deported from the United States, who were among those who arrived in a U.S. military plane the previous day in Amritsar, upon their arrival at the Ahmedabad airport in India, Feb. 6, 2025. (AP Photo/Ajit Solanki, File)

FILE – President Joe Biden greets from left, Australia’s Prime Minister Anthony Albanese, India’s Prime Minister Narendra Modi, and Japan’s Prime Minister Fumio Kishida, at the Quad leaders summit at Archmere Academy in Claymont, Del., Sept. 21, 2024. (AP Photo/Mark Schiefelbein, File)

FILE – An Indian man parks his Harley Davidson Fat Boy motorcycle in New Delhi, India, March 1, 2017. (AP Photo/Manish Swarup, File)

FILE – U.S. President Donald Trump and Indian Prime Minister Narendra Modi embrace after giving a joint statement in New Delhi, India, Feb. 25, 2020. (AP Photo/Manish Swarup, File)

FILE – Indians crowd around Harley Davidson motorcycles at their stall during Auto Expo in New Delhi, India, Jan. 7, 2012. (AP Photo/Mustafa Quraishi, File)

EDITORS AND LIBRARIANS: KILL FROM YOUR SYSTEMS, ARCHIVES AND PUBLISHED PLATFORMS AP PHOTO DEL106 (IMAGE ID 25042378453065), SLUGGED INDIA US MODI AND TRANSMITTED ON FEB. 12, 2025. THE PHOTO HAS BEEN TONED IN A WAY THAT DOES NOT MEET AP’S STANDARDS. NO REPLACEMENT PHOTO WILL BE SENT. – FILE – Jaspal Singh, 36, one of the Indian immigrants deported by the United States talks to his relatives upon his return to his home near Amritsar, India, Feb. 6, 2025. (AP Photo/Prabhjot Gill, File)

FILE – U.S. President Donald Trump offers floral respects, with first lady Melania Trump standing beside him, at Raj Ghat, the memorial for Mahatma Gandhi, in New Delhi, India, Feb. 25, 2020. (AP Photo/Alex Brandon, File)

In December of the previous year, US President Donald Trump mentioned that India imposes “high” tariffs, emphasizing his plan to enforce reciprocal tariffs in response to the taxes New Delhi places on certain American imports. With Trump back in the White House, the prospect of tariffs casts a shadow over India. The US ranks as India’s largest trading partner, with India enjoying a trade surplus. In 2023-24, India’s exports amounted to $77.51 billion compared to $42.2 billion in imports during the last fiscal year. From April to December of this fiscal year, India’s exports to the US increased by 5.57% to approximately $60 billion, while imports rose by about 2% to $33.4 billion. Historically, the US has highlighted concerns over high import duties on Harley Davidson bikes and limited access to medical devices, equipment, and dairy products in India.

Following Trump’s election victory last November, India initiated a comprehensive sector-wise assessment, devising multiple scenarios to brace for potential tariff hikes on exports to the US under Trump’s administration, as reported by ET in December.

India’s prospects under the Trump administration
Trump’s memorandum titled “America First Trade Policy,” released on his first day in office, could present an opportunity for India. The memo instructed the United States Trade Representative (USTR) to pinpoint countries to engage in trade agreements, either bilaterally or within specific sectors, to enhance export access for various American entities. The Indian government is currently reviewing the memo. “We are analyzing the memo and assessing its implications before creating any strategy… At this stage, based on an initial reading, I don’t see anything overly concerning. Our evaluations have yet to materialize into action,” officials informed PTI. The government is also waiting for the official confirmation of the key trade positions in the US.

Indian and US diplomats aim to organize a meeting between Prime Minister Narendra Modi and Trump in Washington in February, according to sources who spoke to Reuters. However, the likelihood of a February meeting remains uncertain. There is a possibility for a bilateral discussion later in the year, especially when the Quad leaders—comprising India, Australia, Japan, and the US—reconvene at an annual summit hosted by India.

Indian officials are contemplating a limited trade agreement with the US within one scenario, according to Bloomberg sources. The proposed plan would involve lowering certain “most-favored nation” tariffs imposed on countries with which India lacks a bilateral trade deal.

Last month, Reuters reported that India is gearing up to propose tariff reductions on certain agricultural and other goods primarily imported from the US, aiming for a more extensive trade and investment deal once Trump assumes office. To address Trump’s proposal of a “reciprocal tax” on Indian goods due to high tariffs, some officials from the Indian commerce ministry are contemplating reductions on specific items like pork, as revealed by a senior government source. Currently, India enforces a 45% import tariff on pork, predominantly sourced from the US. Additionally, tariffs could see reductions on premium medical devices such as pacemakers and luxury motorcycles like Harley Davidson, according to an official with direct knowledge of trade matters, who cited existing tariffs ranging from 25% to 60% on those products. To alleviate Trump’s concerns regarding the trade deficit, officials have also suggested increasing purchases of LNG and defense equipment from the US, as reported by Reuters.

“This presents an opportunity,” noted Arvind Virmani, a government advisor and member of the state-run policy think tank NITI Aayog, speaking to Reuters. “Both the US and India would benefit from shifting more critical and sensitive manufacturing to India rather than relying on China,” he added, suggesting a more ambitious “preferential trade cum investment deal” than the previously discussed mini-trade agreement, which could be mutually beneficial for both nations.

Restarting India-US discussions from a prior standpoint
During Trump’s initial term, a proposed mini-trade agreement aimed at addressing trade discrepancies and enhancing trade relations through limited deals stalled due to disagreements over tariffs, access to markets, and intellectual property. The Biden administration similarly is not keen on a free trade agreement. India now seeks a broader agreement, as reported by Reuters, offering substantial concessions such as production-linked incentives for logistics companies and support for logistics sector.

Kenneth I. Juster, a distinguished fellow at the Council on Foreign Relations, and Mark Linscott, a senior advisor at the U.S.-India Strategic Partnership Forum and the Asia Group, expressed in ‘Foreign Policy’ that this time around, Modi and Trump should take advantage of the opportunity to forge a significant bilateral agreement.

They noted that although US-India economic relations have consistently advanced throughout the 21st century, they have not met expectations in comparison to the remarkable progress made in nearly every other aspect of the bilateral partnership. “However, there are grounds for optimism. Trump enjoys negotiating deals and is eager to enhance the US economy. His tariffs may serve as leverage to unlock foreign markets for US companies, creating jobs related to exports and reducing the bilateral trade deficit. Modi is a strategic thinker focused on fostering India’s economy and expanding its international role,” they stated.

“Both the United States and India aim to strengthen their economic influence in the Indo-Pacific region and mitigate China’s economic dominance. The moment is opportune, and the incentives exist for both leaders to overcome challenges and finalize a major agreement.”

(With contributions from agencies)