Trump and Modi Signal Optimism Over U.S.-India Trade Talks
In a notable change in tone, former U.S. President Donald Trump said he looks forward to speaking with Indian Prime Minister Narendra Modi in the “upcoming weeks” and expressed confidence that a trade deal could be finalized.
“I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries,” Trump wrote on social media.
Modi responded in kind on Wednesday, highlighting the strong ties between the two nations. “Washington and New Delhi are close friends and natural partners,” he said. He added that teams from both countries are working to conclude trade discussions as soon as possible. “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,” Modi said.
The leaders’ positive remarks sent a boost through Indian markets, with shares rising more than 0.5%.
The shift comes after months of tension in U.S.-India relations. Trump had repeatedly suggested that a trade deal was near, but then doubled tariffs on Indian imports to 50%, raising doubts about the future of the partnership that had strengthened during his first term. More recently, Trump and his officials criticized India for buying oil from Russia, accusing the country of indirectly funding the war in Ukraine—a claim New Delhi has denied.
The diplomatic strain coincided with India’s warming ties with China. Modi recently visited China for the first time in seven years for a summit with President Xi Jinping and was photographed holding hands with Russian President Vladimir Putin.
“While the social media statements by Trump and Modi signal a potential rapprochement between the U.S. and India, it is still premature to assume that a resolution will arrive swiftly,” said Madhavi Arora, economist at Emkay Global. “With Trump, we will need to wait for more concrete signals that a deal is in the offing.”
Trade Talks to Resume
Indian and U.S. trade officials are expected to plan visits to resume in-person trade negotiations in September, according to CNBC-TV18, citing sources. A previous visit by U.S. negotiators to New Delhi, scheduled for August 25-29, was canceled due to major roadblocks in discussions.
India’s trade ministry declined to comment on reports of a new round of meetings. U.S.-India two-way goods trade totaled $129 billion in 2024, with the U.S. running a $45.8 billion trade deficit, according to U.S. Census Bureau data.
Trump recently claimed that India had offered to reduce tariffs on U.S. goods to zero, calling the offer “late” and suggesting that India should have done so years ago. He also reportedly urged the European Union to impose 100% tariffs on China and India as a way to pressure Russia.
Indian officials in New Delhi dismissed concerns of EU sanctions, saying the country has been assured that ongoing trade discussions with the bloc will not face unexpected obstacles.
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