India and US agree to resolve trade and tariff disputes

The deals came after talks between US President Donald Trump and Indian Prime Minister Narendra Modi at the White House, just hours after Trump criticized the US business environment in India and announced a plan to impose retaliatory tariffs on countries that impose duties on US imports.

“Prime Minister Modi recently announced reductions in India’s high, unfair tariffs, which severely restrict our access to the Indian market,” Mr. Trump said. “And really, that’s a big deal, I have to say.”
A deal to resolve trade issues could be completed within the next seven months, according to Indian Foreign Minister Vikram Misri.
A joint statement after the meeting said Washington welcomed New Delhi's recent steps to reduce tariffs on some US products and increase market access for US agricultural products, while seeking to negotiate initial segments of a trade deal by the fall of 2025.
While both leaders “have their own views on tariffs,” “what is more remarkable is that… we have a way forward to resolve this issue,” Misri said.
Some of the leaders’ deals are ambitious: India wants to increase purchases of “billions of dollars” of American defense equipment and could make the United States the “number one supplier” of oil and gas, Mr. Trump said at a joint news conference with Mr. Modi.
Mr. Modi, meanwhile, said that New Delhi wants to double trade with Washington by 2030. Long-planned cooperation on nuclear energy, which has also been discussed by the leaders, is now facing ongoing legal challenges.
“We are also paving the way to eventually provide India with F-35 fighter jets,” President Trump said.
Misri, the Indian official, later said the F-35 deal was just a proposal and no formal process had been initiated. The White House did not respond to a request for comment on any deal.

What Trump wants

Although Mr. Trump had a warm relationship with Mr. Modi during his first term, he continued to say on February 13 that India’s tariffs were “very high” and pledged to retaliate, even after his previous tariffs on steel and aluminum hit India, a heavily industrialized nation, particularly hard.
“We are responding to India,” Mr. Trump said at a press conference. “Whatever India imposes, we impose.”
Prime Minister Modi has pledged to protect India’s interests. “One thing I respect and learn from President Trump is that he always puts the national interest first,” Modi said. “Like him, I also always put India’s national interest first over everything else.”
The two leaders praised each other and agreed to strengthen security cooperation in the Indo-Pacific region, an implicit reference to competition with China, as well as begin joint production of technologies such as artificial intelligence.

Asked before the meeting about the steps India was taking, one source described them as a “gift” to Mr. Trump to ease trade tensions. A Trump aide said the U.S. president believed that selling defense and energy equipment to India would help reduce the U.S. trade deficit.
India's energy purchases from the US could increase to $25 billion in the near future from $15 billion last year, Misri said, adding that this could help reduce the trade deficit.
Tariffs will continue to dominate the relationship between the two countries, according to Richard Rossow, head of the India program at the Center for Strategic and International Studies.
“It will be a boxing match,” he said. “India is ready to take a few blows, but there is a limit.”
The US currently faces a $45.6 billion trade deficit with India. Overall, the US's weighted average tariff rate is about 2.2%, according to World Trade Organization data, compared with 12% for India.

Fight illegal immigration

Mr Trump wants more help from India in tackling illegal immigration. India is a large source of immigrants to the US, including a large number in the tech industry on work visas and others living in the US illegally.
The joint statement said the two countries agreed to take strong action to address illegal immigration and human trafficking by enhancing law enforcement cooperation.
India could be a key element in Mr. Trump’s strategy to contain China, which many in his administration see as America’s top rival. India is wary of China’s military buildup in neighboring countries and competition for many goods in many markets.

Mr. Modi is also concerned that Mr. Trump might strike a deal with China without India's participation, according to Mukesh Aghi, chairman of the U.S.-India Strategic Partnership Forum.
India has maintained ties with Russia amid the Ukraine conflict. India remains a major consumer of Russian energy, while the West has tried to cut consumption since the war began.
“The world has thought that India is a neutral country in this entire process,” Mr. Modi said. “But that is not true. India has a stand, and that stand is peaceful.”