Donald Trump, PM Modi reignite hopes of trade deal at 'the earliest'

India and the US are stepping up trade negotiations as both leaders express confidence in resolving barriers after earlier setbacks over tariffs and Russian oil imports

Signalling an easing of tensions between the United States and India, American President Donald Trump and Prime Minister Narendra Modi posted conciliatory messages on social media, expressing optimism about resolving outstanding issues and concluding a trade deal at the earliest. 

On Tuesday evening (Washington time), Trump announced that both countries were continuing negotiations to address trade barriers, adding that he looked forward to meeting Modi in the coming weeks. Echoing similar sentiment, Modi on Wednesday said that teams from both countries were working to conclude discussions as soon as possible. 

“I am pleased to announce that India and the United States of America are continuing negotiations to address the trade barriers between our two nations. I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!,” Trump said on Truth Social. 

 

Quoting Trump’s post, Modi said on social media platform X: “India and the US are close friends and natural partners. I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership. Our teams are working to conclude these discussions at the earliest. I am also looking forward to speaking with President Trump. We will work together to secure a brighter, more prosperous future for both our people.” 

Trump’s decision to impose a 25 per cent reciprocal tariff, along with an additional 25 per cent levy on India for purchasing Russian oil, had previously strained bilateral ties, after both sides failed to reach an interim trade deal. 

Despite the positive remarks on an early trade deal with India, Trump has reportedly urged European Union (EU) officials to hit India and China with secondary tariffs of up to 100 per cent as part of a strategy to pressure Russian President Vladimir Putin, according to Reuters. China and India are the largest purchasers of Russian oil. The EU is currently considering a 19th round of sanctions against Russia for its war in Ukraine.

 

According to the report, Trump made the request to EU sanctions envoy David O’Sullivan and other EU officials. The US indicated it would be willing to impose similar tariffs if the bloc followed through on the request.

 

Meanwhile, White House trade adviser Peter Navarro said on Wednesday that the US does not need “unfair trade” with India, but suggested that New Delhi is “desperately” seeking access to American markets.

 

Delhi-based think tank Global Trade Research Initiative (GTRI) cautioned against misplaced optimism regarding Trump’s remarks on an early deal. “Top Trump aides like Peter Navarro and Scott Bessent have used abusive language against India, showing the real tone of Washington’s approach. Unless the US drops these tariffs -- which looks unlikely given the Supreme Court case -- no trade negotiation can realistically move forward. Trump’s warm words may simply be a tactic to weaken India’s resolve in pursuing multipolar ties with Russia and China,” GTRI said.

 

In February, Modi and Trump announced their intention to conclude the first phase of a bilateral trade agreement (BTA) by the fall of 2025. The terms of reference were finalised in March, and both sides held five rounds of intensive negotiations until July. Talks stalled, however, over India’s refusal to grant the US unhindered market access to its politically sensitive agriculture and dairy sectors.