Trump and Modi to aim for ‘fair’ U.S.-India trade deal this year

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President Donald Trump will host Indian Prime Minister Narendra Modi in Washington on Thursday, as the two leaders work toward a trade deal and try to reinforce a relationship that the Trump administration has signaled is critical to countering the rise of China, according to senior Trump administration officials who previewed the meeting in a call.

The meeting with Modi – who will be the fourth foreign leader to visit Trump in the White House since his inauguration – is one of the earliest measures of how Trump will handle his relationship with New Delhi. The partnership is a pillar in Washington’s strategy in the Indo-Pacific region, but one that is beset with trouble spots on illegal immigration, visas, America’s trade deficit with India and controversies over India’s attempted assassination of a Sikh activist on American soil.

The visit may be complicated by Trump’s announcement on Thursday afternoon of a new “reciprocal” tariff policy which would tax foreign goods at the same rate that other nations apply to American products.

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Trump and Modi are scheduled to discuss issues including trade, defense, energy, infrastructure and regional partnerships, according to the senior administration officials. The officials said the Trump administration hopes to announce a “fair” trade deal between the countries this year that would reduce the bilateral trade deficit. The issue of immigration did not come up on the morning call.

The administration suggested there would be a “new defense framework” between the two countries, along with announcements around semiconductors, critical minerals, and supply chain resilience. The officials stressed the warm relationship between the two leaders, saying that Trump augmented their alliance by supporting Modi after Chinese and Indian forces clashed at a disputed part of the countries’ border in 2020.

The Trump administration also signaled the importance of the United States’ geopolitical relationship with India, with one senior official saying it is “one of the most critical, if not the most critical bilateral relationship of the 21st century,” framing it as a key element in the U.S. strategy to counter the rise of China.

The United States is India’s largest trading partner, buying more than 18 percent of all its exports. America is running a $45 billion trade deficit with India, and Trump is keen to shrink it. The lack of parity, as well as lingering frustration from a trade deal that never materialized during his first term, drove Trump to describe India on the campaign trail last year as a “very big abuser” of tariffs.

In a call with Modi last month – the second such conversation between the two leaders since the American election – Trump stressed the “importance of India increasing its procurement of American-made security equipment and moving toward a fair bilateral trading relationship,” according to a White House readout.

Modi is visiting Washington armed with concessions aimed at averting a trade war and staving off damaging tariffs on the world’s fifth-largest economy. The concessions include a commitment to significantly boost purchases of American energy. New Delhi has already reduced tariffs on high-end American motorcycles – a fixation for Trump, who repeatedly called the 100 percent duty on Harley-Davidsons “unacceptable.”

India is also open to offering the United States tariff concessions in a number of sectors, including electronics, medical equipment and chemicals, an analyst familiar with the matter said. The Modi administration is looking at potential deals on U.S. agriculture exports and nuclear energy investments, the analyst added, talking on the condition of anonymity to discuss sensitive matters. Reuters earlier reported the possible concessions.

Ahead of his meeting with Trump, Modi on Thursday met with the president’s national security adviser, Michael Waltz. He also held meetings with billionaire Elon Musk and Vivek Ramaswamy, according to Indian officials. On Wednesday, he held talks with Trump’s Director of National Intelligence, Tulsi Gabbard.

The trip comes in the wake of tensions around immigration. Last week, scenes of the dramatic deportation of more than 100 Indians, who were sent back in shackles on a military jet, caused enormous embarrassment to Modi domestically. India is a major source of illegal immigration to the United States. As of 2022, it accounted for 725,000 out of the estimated 11 million undocumented immigrants in the country, according to the Pew Research Center.

Over the Christmas holidays, far-right activists in Trump’s base engaged in a “civil war” with Elon Musk and other senior Trump allies over the need for a skilled worker visa program that Silicon Valley has long relied on. Many Indians decried the backlash as “racist.”

Several hundred protesters and counterprotesters massed outside the White House’s entrances, alternately decrying Modi or praising him.

Dozens of Sikhs seeking to create a separate homeland waved flags for the Khalistan movement or held placards such as one urging Trump to “cut Modi down to size.”

Many said they were uncomfortable speaking to a reporter because of their fears of reprisal, citing the assassination attempts of Sikh separatists. “We like President Trump. We don’t like Prime Minister Modi because he’s against Sikh rights,” said one protester, who gave his name as Mr. Singh. “We don’t like to share [our] first names, because he just comes for any country … and kills so many Sikh people.”

Meanwhile, a smaller group of pro-Modi demonstrators stood on 17th Street NW, holding signs that read “America Welcomes Narendra Modi.” The demonstrators said they supported efforts to crack down on illegal immigration from India, but criticized the overly harsh treatment of some recent deportees.

“We agree that they should be deported, but at the same time, there should be some respectful deportation,” said a man who gave his name as Puneet Goel. He also said that he and his fellow demonstrators wanted “the tariff issue to be resolved for the benefit of both the countries.”

The two leaders have forged a positive relationship since their first meeting in 2017, punctuated by reciprocal mass rallies – “Howdy Modi” in Houston in 2019 and “Namaste Trump” in Ahmedabad, India, in 2020. Their bond stems from a shared strategic interest in countering China as well as the cultivation of a strongman image.

Washington has over the past 20 years grown closer to New Delhi, slowly diminishing its decades-long dependence on Russian arms, for instance, though India has been buying large quantities of Russian oil.

Heightened tensions with China after deadly border clashes in 2020 helped drive India closer to the United States, which has provided intelligence and equipment, including leased Predator drones, to help India defend its frontier.

Trump in his first term revived a grouping known as “the Quad,” consisting of India, Japan, the United States and Australia and widely seen as a counterweight to China’s growing influence in the region. The Biden administration advanced the initiative, hosting summits, and analysts say that Trump may push the group in a direction more oriented toward security and defense.

The two countries established a significant partnership in emerging technology during the Biden administration, announcing for instance co-production plans for military jet engines and armored infantry vehicles. Dubbed the initiative on critical and emerging technologies, it aids India’s desire to grow its own defense industry and become more resilient in the face of Chinese military and economic coercion.

One area that President Joe Biden said he stressed with Modi, and that is likely to have a lower profile now, is human rights, analysts said. The attempted assassination on American soil of a Sikh activist in 2023 caused great tension between the two governments and led to murder-for-hire charges against an Indian intelligence official, who has since left the government.

Senior Trump administration officials declined to comment on the attempted assassination of the Sikh activist on the Thursday call, instead referring to Trump’s recent efforts to return hostages from abroad.

Lisa Curtis, a senior fellow at the Center for a New American Security and White House senior director for South Asia in Trump’s first term, said that issue may get less attention in the future.

“I think now that issue is somewhat behind us,” she said. “I think the Trump administration is probably hoping to move on and to move forward with the relationship.”

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