US President Donald Trump and Prime Minister Narendra Modi on Wednesday signalled optimism over arriving at a trade deal in the foreseeable future, keeping faith in the ability of the bilateral relationship to tide over the differences that have cropped up in recent months vis-à-vis the trade negotiations.
While Trump has changed the tone and tenor of his public remarks on India and the trade deal that the two countries have been negotiating for months, this did not extend to his trade adviser Peter Navarro. Navarro kept up his rant against New Delhi amid a report in the Financial Times that the US President was also asking the European Union to impose 100 per cent tariffs on India and China to force Russian President Vladimir Putin to end the war against Ukraine.
On Wednesday morning (India time), Trump wrote on his Truth Social platform: “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!”
Modi reciprocated with a post on 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.”
Only time will tell how the negotiations will pan out but for now, Trump appears to be staying the reconciliatory course that he embarked upon on Saturday after months of publicly baiting India by repeatedly claiming to have brokered peace between New Delhi and Islamabad, and then singling India out for an additional tariff of 25 per cent as penalty for buying Russian oil when China buys way more petro products from Moscow.
Despite the cordial exchanges on social media between Modi and Trump, trade talks between India and the US face a series of impediments that could complicate efforts to strike a deal. The appeal filed by the Trump administration in the US Supreme Court to restore tariffs struck down by lower courts cited India’s purchase of Russian oil to justify keeping the tariffs. Removing tariffs may weaken Trump’s own court case, making any relief for India highly improbable.
Moreover, there has also been little headway in finding a middle ground on Trump’s insistence on providing access to American agri and dairy products. Also, the two countries are at loggerheads at the World Trade Organisation over the sectoral tariff Trump imposed on steel and aluminium products.
Strategic commentator Brahma Chellaney was of the view that Trump had already pushed India to adopt a defensive strategy instead of imposing retaliatory tariffs. In a post on X, he said: “Trump’s shift in tone on India may highlight his fickle, transactional style. But the real story is that he already has India on the defensive through punishing tariffs and secondary sanctions. Modi, by refusing to impose retaliatory tariffs, has left India with little leverage.
“Entering talks with a weakened hand means New Delhi will likely be forced into deeper concessions than it was ever prepared to make before Trump’s punitive measures. Any trade deal that emerges with the US could quickly turn into a ‘hot potato’ in Indian domestic politics, much as it has in Japan and South Korea.”