India’s Modi To Bring Tariff Concessions, Business Deals To Trump Meeting

Indian Prime Minister Narendra Modi will meet Donald Trump on Thursday, bringing tariff concessions, new business deals, and the prospect of cooperation on China in hopes of winning the U.S. president’s favour.

Trump, not yet one month into his presidency, has wielded the threat of tariffs against friend and foe alike to try to extract new trade deals, investment or law enforcement help.

‘Very Big Abuser’

India may not be an exception: Although Trump had a warm relationship with Modi in his first term, he has called India a “very big abuser” of trade and his levies on steel and aluminium hit India particularly hard.

Ahead of his White House meeting with Trump on Thursday, Modi has readied tariff concessions and promises including increased liquefied natural gas, combat vehicle and jet engine purchases, according to Indian government officials who declined to be named.

Trade Negotiations

Indian officials are also looking at trade negotiations, possible deals on U.S. agriculture exports to India and investment in nuclear energy, along with tariff cuts in at least a dozen sectors, including electronics, medical and surgical equipment, and chemicals.

Those are areas Trump’s team believes India needs to make improvements, according to another person familiar with their thinking.

‘Gift’ For Trump

It’s a “gift” for Trump, said one of the sources, who declined to be named as they previewed a private meeting.

For his part, Modi wants help with the case of billionaire Gautam Adani, an ally of his who was indicted by the Justice Department in November over an alleged bribery scheme. Adani denies wrongdoing.

Another thorny issue will be in the background: the alleged Indian intelligence plot to assassinate a Sikh activist in the United States during the administration of Trump’s predecessor, Joe Biden.

‘Boxing Match’

This time, the tariff issue will be front and centre, said Richard Rossow, head of the India program at the Center for Strategic and International Studies, a Washington think tank.

“It’s going to be a boxing match,” he said. “I think India is willing to take a few hits, but there’s a limit.”

The U.S. has a $45.6 billion trade deficit with India. Overall, the U.S. trade-weighted average tariff rate has been about 2.2%, according to World Trade Organization data, compared with India’s 12%.

Trump’s administration has vowed reciprocal tariffs on every country that charges duties on U.S. imports, a move that will ratchet up fears of a widening global trade war.

What Trump Wants

Trump wants more assistance from India on unauthorized immigration. The country is a major source of immigrants to the United States, including a large number in the tech industry on work visas and others in the U.S. illegally.

Modi is expected to meet one-on-one with Elon Musk during his trip to Washington, two people familiar with the plans told Reuters. The billionaire is a key Trump ally and his Starlink company’s bid to enter the South Asian market could come up for discussion.

India may prove critical to Trump’s strategy to thwart China, which many in his administration see as the top U.S. rival.

India’s China Worries

India is wary of neighbouring China’s military buildup and competes for many of the same markets.

Modi also worries that Trump could cut a deal with China that excludes India, according to Mukesh Aghi, president of the U.S.-India Strategic Partnership Forum lobbying group.

“Even though much of the talk will be on the bilateral relationship, on trade, on immigration, defence purchases, the China thread will weave through the meeting,” said Lisa Curtis, an India-focused former White House official during the first Trump administration now with the Center for a New American Security think tank.

Avoiding Direct Confrontation

Still, India tries to avoid direct confrontation with Beijing and maintains a foreign policy of “strategic ambiguity” to avoid picking sides in major international conflicts.

That approach has also meant that India has continued its ties with Moscow as it carries out its war with Ukraine. India has remained a major consumer of Russian energy, for instance, while the West has worked to cut its own consumption since the war started.

Trump’s Ukraine Negotiations

Trump spoke on Wednesday with both Russian President Vladimir Putin and Ukraine’s Volodymyr Zelenskyy about starting negotiations to end the war in Ukraine.

The U.S.-India meeting will offer clues as to what, if any, pressure Trump wants major outside powers to apply to advance those talks.

(With inputs from Reuters)