WASHINGTON, Feb 13 (Reuters) – On Thursday, India and the U.S. agreed to initiate discussions aimed at finalizing an early trade agreement and resolving their tariff disputes, with New Delhi committing to increase its purchases of U.S. oil, gas, and military equipment, as well as combat illegal immigration. These agreements were reached following talks between U.S. President Donald Trump and Indian Prime Minister Narendra Modi at the White House, shortly after Trump criticized the business environment for U.S. companies in India and presented a strategy for reciprocal tariffs on nations imposing duties on U.S. imports. “Prime Minister Modi recently announced reductions to India’s unfair and excessively high tariffs that restrict our access to the Indian market, which is quite a significant issue,” Trump stated. India’s Foreign Secretary Vikram Misri mentioned that the trade concerns could potentially be resolved within the next seven months. A joint statement released post-meeting indicated that Washington appreciated New Delhi’s recent initiatives to lower tariffs on certain U.S. products and enhance market access for U.S. agricultural goods, while aiming to negotiate the initial phases of a trade deal by the fall of 2025. Although both leaders had differing views on tariffs, Misri noted, “What stands out more is that we have identified a path forward on this matter.” Some of the agreements discussed were aspirational: India aims to significantly boost its purchases of U.S. defense equipment and may position Washington as its primary supplier of oil and gas, as Trump mentioned during a joint press conference with Modi. Modi also expressed a desire to double trade with the U.S. by 2030. Ongoing legal challenges continue to hinder planned cooperation on nuclear energy, which was also on the agenda. “We are also laying the groundwork to eventually provide India with F-35 stealth fighters,” Trump stated. Misri later clarified that the F-35 deal is currently just a proposal with no formal process initiated. The White House did not provide comments regarding any agreements. Despite having a friendly rapport with Modi during his first term, Trump reiterated on Thursday that India’s tariffs are “very high” and promised to reciprocate, even after his earlier tariffs on steel and aluminum had a significant impact on India’s metal industry. “We are being reciprocal with India,” Trump remarked during the press conference. “Whatever India charges, we charge them.” Modi assured that he would safeguard India’s interests. “One thing I truly value, and have learned from President Trump, is his unwavering focus on national interest,” Modi said. “Like him, I prioritize India’s national interest above all else.” The two leaders commended each other and agreed to enhance security cooperation in the Indo-Pacific, subtly referencing competition with China, as well as to begin joint production in fields like artificial intelligence. Prior to the meeting, a source described the steps India was taking as a “gift” for Trump, aimed at easing trade tensions. An aide to Trump noted that the president views defense and energy sales to India as a means to reduce the U.S. trade deficit. India’s energy purchases from the U.S. could rise to $25 billion soon, up from $15 billion last year, according to Misri, who added that this could help diminish the trade deficit. Richard Rossow, head of the India program at the Center for Strategic and International Studies, a think tank, stated that tariffs will continue to play a significant role in the relationship between the two nations. “It’s going to be a boxing match,” he commented. “India is prepared to endure some blows, but there is a limit.” The U.S. currently faces a $45.6 billion trade deficit with India. The overall trade-weighted average tariff rate for the U.S. is approximately 2.2%, according to World Trade Organization data, while India’s stands at 12%. Trump is also seeking more cooperation from India regarding unauthorized immigration. India is a significant source of immigrants to the U.S., including many in the tech sector on work visas and others residing in the U.S. illegally. The joint statement indicated that both nations agreed to tackle illegal immigration and human trafficking more vigorously by enhancing law enforcement collaboration. India could play a crucial role in Trump’s strategy to counter China, which many in his administration regard as the foremost U.S. competitor. India remains cautious of China’s military expansion and competes for similar markets. Modi is also concerned that Trump might strike a deal with China that could sideline India.
