Indian Prime Minister Narendra Modi concluded a two-day visit to the United States on 13 February. The visit included a meeting with US President Donald Trump, during which key topics such as the India-US partnership, the development of economic corridors, trade, and tariffs were discussed. This marked Modi’s first meeting with Trump since his re-election and came amid increased tensions due to Trump’s tariffs.
Key Points Discussed
- Trade and Energy:
- Trump announced a deal with India to facilitate the purchase of more crude oil and natural gas from the US, aiming to reduce the US trade deficit with India. India currently imports most of its oil from Russia, Iraq, Saudi Arabia, and the United Arab Emirates.
- The countries have agreed to negotiate the first phase of a Bilateral Trade Agreement by the fall of 2025 and set a target of USD 500 billion in annual bilateral trade by 2030. However, Trump has maintained that he will not exempt India from reciprocal tariffs and has called Indian tariffs on US products unfair.
- Both leaders reiterated their commitment to the India-Middle East Economic Corridor (IMEC) and the India-Israel-US-UAE (I2U2) initiatives, which focus on increasing connectivity between participating countries.
- Trump announced the extradition of Tahawwur Rana, who is accused of participating in the 2008 terror attacks.
- India and the US will build American-designed nuclear reactors in India under the civil nuclear deal between the two countries.
- The US plans to increase military sales to India and has proposed selling F-35 fighter jets while establishing a new defence cooperation framework.
- Both countries have also committed to accelerating AI infrastructure development by the end of 2025.
- Two new Indian consulates are planned for Los Angeles and Boston. Additionally, the countries agreed to strengthen collaborations between educational institutions.
Outlook and Implications
The meeting between PM Modi and President Trump will shape bilateral relations between the two countries over the next few years. The various partnerships and multilateral collaborations indicate a push for stronger India-US relations. Increased US military spending could enhance India’s defence capabilities. Collaboration in nuclear energy and AI is expected to boost technological advancements in both sectors.
The trade target set by both nations could encourage Indian and US companies to invest in high-value industries. However, the US’s reciprocal tariffs pose a significant risk to investments and businesses. The upcoming trade negotiations later this year could lead to some concessions.
