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US President Donald Trump has announced that his administration is actively negotiating to remove trade barriers with India and expects to speak with Prime Minister Narendra Modi in the coming weeks. This development has sparked optimism about reaching a new trade agreement, following weeks of tension.
Trump expressed a positive outlook on social media, stating he looks forward to connecting with Modi soon and believes both countries can achieve a mutually beneficial resolution. In response, Modi also shared a hopeful message, emphasizing the strong friendship and partnership between Washington and New Delhi. He highlighted that both teams are working diligently to conclude trade talks quickly and anticipates a joint effort toward a prosperous future for their peoples.
Recently, Trump suggested that India might reduce its tariffs on U.S. goods to zero, criticizing the delay and suggesting that India should have lowered tariffs years ago. His more optimistic remarks follow a period of fluctuating negotiations that strained the relationship.
India’s top economic advisor warned that the 50% tariffs imposed by Trump could potentially cut India’s gross domestic product by half a percentage point in 2025. Trump had previously claimed the two sides were close to a trade deal but then doubled tariffs on Indian imports, raising concerns about the future of U.S.-India economic ties, which had grown stronger during Trump’s earlier term.
These higher tariffs followed India’s refusal to cease buying Russian oil amid U.S. efforts to pressure Moscow over Ukraine. Additionally, reports indicate Trump has been urging the European Union to impose 100% tariffs on imports from India and China.
In 2024, U.S.-India trade in goods totaled $129 billion, with the U.S. experiencing a deficit of approximately $45.8 billion, according to data from the U.S. Census Bureau.
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