Ahead of tariff talks, PM Modi meets Vance, wife Usha in Paris
By A Draft Correspondent
In a significant diplomatic engagement set to shape the trajectory of Indo-U.S. trade relations, Prime Minister Narendra Modi is gearing up for a crucial meeting with U.S. President Donald Trump, where tariff concessions are expected to take centre stage. Modi’s two-day visit, commencing on February 12, 2025, comes amid growing global trade tensions, with Washington contemplating sweeping tariffs, including a hefty 25% duty on steel and aluminium imports.
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| Prime Minister Narendra Modi met U.S. Vice President J D Vance and his Indian-origin wife Usha on the sidelines of the AI Action Summit in Paris |
The Indian government, keen on fostering a more balanced trade dynamic, is actively considering reducing tariffs across a spectrum of sectors—from electronics to medical equipment and chemicals—aligning with its larger vision of boosting domestic production while facilitating American exports.
Trump, known for his hard stance on trade imbalances, has previously labelled India a "very big abuser" in trade matters, urging the nation to procure more U.S.-made security equipment as a step towards a fairer two-way relationship. As Modi prepares to engage in high-stakes discussions, government officials have indicated that India is open to negotiating a mini trade deal, which could serve as a buffer against a potential trade conflict similar to the ongoing U.S.-China tariff war. The overarching goal is to prevent any economic escalation that could jeopardise the $118 billion two-way trade relationship between India and the U.S., which saw India enjoying a trade surplus of $32 billion in the fiscal year 2023-24.
While tariff negotiations are set to dominate discussions, the timing of the visit is particularly crucial as it coincides with the recent deportation of Indian nationals from the U.S., adding a layer of political sensitivity to the diplomatic engagement. Additionally, with Trump already imposing sweeping tariffs on Chinese imports—triggering retaliatory action from Beijing—the Modi administration is treading carefully to ensure India does not find itself embroiled in a similar economic crossfire.
India’s latest budgetary measures, which saw import tariffs reduced from 13% to 11% on several key commodities, reflect a concerted effort to recalibrate trade policies in anticipation of potential tariff hikes by the U.S. Moreover, with luxury car and solar cell surcharges under review, New Delhi is signalling its willingness to engage in pragmatic trade negotiations. However, with Trump’s tariff policies rattling global markets—triggering a sharp decline in metal stocks and exposing nearly $25 billion worth of India’s engineering exports to risk—stakeholders in both nations are closely monitoring the unfolding developments.
As Modi and Trump prepare for their diplomatic tête-à -tête, the stakes are high. While India seeks to deepen its strategic and economic partnership with the U.S., the challenge lies in navigating Trump’s protectionist trade policies without compromising India’s economic interests. Whether this visit paves the way for a mutually beneficial trade agreement or ushers in a new phase of trade hostilities remains to be seen, but one thing is certain—New Delhi’s diplomatic dexterity will be put to the ultimate test.
Trump, known for his hard stance on trade imbalances, has previously labelled India a "very big abuser" in trade matters, urging the nation to procure more U.S.-made security equipment as a step towards a fairer two-way relationship. As Modi prepares to engage in high-stakes discussions, government officials have indicated that India is open to negotiating a mini trade deal, which could serve as a buffer against a potential trade conflict similar to the ongoing U.S.-China tariff war. The overarching goal is to prevent any economic escalation that could jeopardise the $118 billion two-way trade relationship between India and the U.S., which saw India enjoying a trade surplus of $32 billion in the fiscal year 2023-24.
While tariff negotiations are set to dominate discussions, the timing of the visit is particularly crucial as it coincides with the recent deportation of Indian nationals from the U.S., adding a layer of political sensitivity to the diplomatic engagement. Additionally, with Trump already imposing sweeping tariffs on Chinese imports—triggering retaliatory action from Beijing—the Modi administration is treading carefully to ensure India does not find itself embroiled in a similar economic crossfire.
India’s latest budgetary measures, which saw import tariffs reduced from 13% to 11% on several key commodities, reflect a concerted effort to recalibrate trade policies in anticipation of potential tariff hikes by the U.S. Moreover, with luxury car and solar cell surcharges under review, New Delhi is signalling its willingness to engage in pragmatic trade negotiations. However, with Trump’s tariff policies rattling global markets—triggering a sharp decline in metal stocks and exposing nearly $25 billion worth of India’s engineering exports to risk—stakeholders in both nations are closely monitoring the unfolding developments.
As Modi and Trump prepare for their diplomatic tête-à -tête, the stakes are high. While India seeks to deepen its strategic and economic partnership with the U.S., the challenge lies in navigating Trump’s protectionist trade policies without compromising India’s economic interests. Whether this visit paves the way for a mutually beneficial trade agreement or ushers in a new phase of trade hostilities remains to be seen, but one thing is certain—New Delhi’s diplomatic dexterity will be put to the ultimate test.
