Analysis: Modi leaves Trump summit with a to-do list

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Indian Prime Minister Narendra Modi was counting on a series of concessions ahead of his meeting with US President Donald Trump to keep his country in the US’s good graces after weeks of tariff threats.

It wasn’t enough.

Now Modi heads back to New Delhi with the prospect of looming duties on Indian exports and demands that his country buy more US goods – from American energy to the most expensive US weapons systems – showing that the two leaders’ bonhomie from Trump’s first term will only go so far.

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The outcome of the first meeting between the two leaders since 2020 underscored Trump’s determination to upend trade ties with every nation – even US partners. Not only did Trump announce that the US would begin imposing “reciprocal” tariffs just hours before meeting with Modi, he criticized the country’s policies at a news conference with the Indian leader standing right by him.

“India has been to us just about the highest-tariffed nation in the world,” Trump said at the White House, with Modi looking on. “Whatever India charges, we’re charging them.”

Indian officials familiar with the discussions say the meeting between the two leaders wasn’t all bad. While India will wait to see the fine print of the reciprocal duties, an agreement to move forward with a bilateral trade pact gives India room to negotiate, the officials said, asking not to be identified because the discussions are private.

Modi was among the earliest batch of foreign leaders to visit Trump, a group that includes the prime ministers of Japan and Israel. The trip followed years of deepening ties between the US and India, which Washington has been cultivating as a regional bulwark against a more assertive China.

American companies from Apple Inc. to Starbucks Corp. have also ramped up their investments in India, seeking to tap its growing consumer base and curb a reliance on Chinese supply chains.

Even in Trump’s first term, when he and Modi enjoyed warm personal ties, India’s tariff policy was a regular source of dispute. With Trump’s second term underway, Modi has taken a more accommodative approach, cutting import tariffs on a raft of goods like Harley-Davidson Inc. motorcycles.

New Delhi went further on Thursday, cutting taxes on bourbon to 100% from 150%, satisfying another key demand from the US.

One senior US official told Bloomberg News on condition of anonymity that the moves were modest but well-received. Still, it was clear Modi left the White House with a to-do list, and Trump made it clear that he is intent on bringing down the US’s $41 billion trade deficit with India.

“We believe that India still remains in Trump’s line of fire on reciprocal tariffs, even as the two countries have reiterated their strategic partnership,” said Sonal Varma, chief economist for India at Nomura Singapore Ltd.

India’s Ministry of External Affairs and Finance Ministry didn’t immediately respond to requests for further information.

Fighter Jets

Among India’s most noteworthy pledges were its commitments to ramp up purchases of US energy and weaponry. Currently, Russia is the main supplier of both to India, and the US has long been eager to edge out Moscow.

In response, Trump said the US would offer to sell the Lockheed Martin Corp. F-35 fighter jet to India as part of the two nations’ tightening defense ties. Any such sale, however, remains complicated by the warplane’s exorbitant pricetag, as well as concerns over technology theft given India’s extensive Russian defense links.

“The timeframe for the F-35 sale remains unclear, but it’s clearly something Trump will push hard given the revenue that the US can draw from selling such an expensive system,” said Michael Kugelman, director at the South Asia Institute of the Wilson Center.

Modi also left the meeting without any apparent pledge to preserve his nation’s key channel of legal immigration to the US, through the H-1B visa program for high-skilled workers. That’s despite Modi’s openness to taking back undocumented Indian migrants from the US – a stance that has prompted some political backlash back home.

One issue Modi said didn’t come up in the talks was the state of Indian billionaire Gautam Adani’s indictments by the US for allegedly paying hundreds of millions of dollars in bribes to government officials in India. Adani, seen as a key ally of Modi, has rejected the accusations.

‘Personal Matters’

“When it comes to such personal matters, two leaders of two countries will not get together on the topic and discuss anything on an individual matter,” Modi said at the news conference.

For all their disagreements, Modi and Trump wrapped up their meeting with several points in common. The two sides pledged to boost bilateral trade to $500 billion by 2030 – up from $126.6 billion in 2023 – and committed to deepen their cooperation on defense and technology sharing.

Yet the disparity between the tariffs that India charges on US imports and America’s own levies leaves India at a disadvantage when it comes to any future talks over a US-India trade deal, said Shumita Deveshwar, chief India economist at GlobalData.TS Lombard.

“There are more concessions to be made because, for us, the US is a far bigger market than India is for the US,” she said. “We do come from a position of disadvantage into these talks.”

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