During a recent meeting in Washington D.C., Indian Prime Minister Narendra Modi praised the burgeoning “mega partnership” between the United States and India. This meeting culminated in the announcement of a significant agreement for India to import increased quantities of American oil and gas, an initiative aimed at reducing the trade deficit between the two nations.
Modi’s two-day visit comes in the wake of President Trump’s directive mandating that all US trading partners—including India—face substantial reciprocal tariffs. Despite the complexities of trade relations, both leaders expressed admiration for one another’s leadership while addressing contentious trade issues. Trump pointedly criticized India’s high tariffs, labeling them as a “big problem.” In response, Modi indicated his willingness to consider lowering tariffs on US imports, repatriating undocumented Indian nationals, and acquiring US military fighter jets.
Strengthening Economic Ties
At a joint press conference, Modi referenced Trump’s campaign slogan, offering a twist of his own: “It’s Make India Great Again – Miga.” He elaborated, saying, “Maga plus Miga…[is a] Mega partnership for prosperity.” Trump supported this sentiment, stating that India would be “purchasing a lot of our oil and gas” to help alleviate the trade imbalance. He emphasized, “They need it. And we have it.” This energy deal is seen as a strategic step, particularly as India relies heavily on imported oil from various countries.
Radhika Rao, a senior economist at DBS Bank in Singapore, highlighted the significance of this partnership, noting that the US is India’s largest export market. She remarked that the US administration appears eager to improve trade relations and offer concessions to narrow the existing trade deficit. However, Amitendu Palit, a senior research fellow at the National University of Singapore, cautioned that US oil and gas could be more expensive for India due to a stronger dollar, complicating efforts to balance its trade deficit.
Addressing Immigration and Security Concerns
In addition to economic discussions, the two leaders touched upon immigration, another sensitive issue in US-India relations. Trump announced the extradition of an individual allegedly involved in the 2008 Mumbai terror attacks, emphasizing the importance of justice for India. Modi expressed gratitude for this decision and reiterated India’s commitment to accept repatriations of undocumented Indian immigrants residing in the US.
Recently, the US deported 104 undocumented Indians, with reports of deportees traveling in shackles. This controversial action highlights the significant number of unauthorized immigrants from India in the US, many of whom are holders of H-1B visas—a program that Trump has previously scrutinized.
Looking ahead, Trump has been vocal about implementing broad new tariffs on US trading partners, which he claims will invigorate American manufacturing and create jobs. He has previously criticized the US’s trade dynamics, stating, “our allies are worse than our enemies” when it comes to import taxes. As he prepares to address trade policies, the White House disclosed that India’s average applied Most Favoured Nation (MFN) tariff stands at 39%, in stark contrast to the average 5% for other nations.
In light of these developments, the US continues to scrutinize its trade relationships, including imposing additional tariffs on imports from countries such as China, Canada, and Mexico, while also reevaluating existing agreements to ensure fairness in trade.