Modi-Trump Dialogue Advances India-US Relations

The latest bilateral meeting between Indian Prime Minister Narendra Modi and US President Donald Trump at the White House Oval Office in Washington, D.C., marks a pivotal moment in the India-US partnership. The discussions covered key areas such as trade, defense cooperation, energy security, space exploration, and regional security concerns.

Indian Prime Minister Narendra Modi’s meeting with US President Donald Trump in Washington, D.C., on February 14, 2025, marks a pivotal step in the bilateral and trade relations between two leading economies. The latest rounds of discussions also explored India-US collaboration avenues in securing energy supplies, advancing defense procurement, deepening civil nuclear cooperation, and enhancing cooperation in artificial intelligence and emerging technologies. 

Both leaders underscored their commitment to strengthening ties, setting ambitious goals, and enhancing collaboration on multiple fronts.

India-US economic relations: Aiming for US$500 billion in trade by 2030

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One of the key takeaways from the recent India-US discussions was the ambitious goal of doubling bilateral trade to US$500 billion by 2030. Currently, the US ranks as India’s second-largest trading partner, with a trade surplus of US$23.26 billion for India as of FY2024-25 (April to November).

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Note* The India-US trade data for FY2024-25 will be released in April after the completion of the ongoing financial year, ending on March 31, 2025. 

Modi emphasized that India and the US are committed to strengthening their economic partnership. Both nations are working toward finalizing a mutually beneficial trade agreement to facilitate this ambitious trade expansion.

Expected impact of tariffs on trade

As part of his economic policies, Trump announced a 25 percent tariff on all steel and aluminum imports, effective March 12, 2025. This move is expected to intensify global trade tensions and create challenges for steel exporters, including India.

Tariffs, also referred to as customs duties, are taxes levied on imported goods. These duties are paid by importers to the government and are often passed on to consumers. For example, if a company imports a product worth US$100 with a 10 percent tariff, the final cost rises to US$110.

US trade deficit and tariff measures

Countries impose reciprocal tariffs to match or counter trade barriers set by their trading partners. For instance, when the US raised tariffs on Indian steel and aluminum in 2018, India responded by increasing duties on 29 US products.

The US is experiencing substantial trade deficits, particularly with countries like China and India. In FY2023-24, the US had a trade deficit of US$35.31 billion with India. To bridge this gap, the US government is implementing tariffs to curb imports.

Defense cooperation: F-35 fighter jets and military sales

Defense cooperation continues to be a pivotal aspect of the India-US partnership, with both nations taking major steps to enhance military collaboration. In a groundbreaking move, the US has confirmed its willingness to supply India with F-35 stealth fighter jets, granting India access to one of the world’s most advanced combat aircraft. This decision places India among a select group of nations authorized to acquire these cutting-edge jets, reflecting the deepening strategic ties between the two countries.

By fostering greater defense ties, India and the US are not only enhancing bilateral security but also reinforcing their shared interests in maintaining a free and open Indo-Pacific region. This growing defense partnership is set to play a crucial role in shaping the geopolitical landscape in the years to come.

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Beyond the acquisition of the F-35s, the US has also reiterated its aim to expand military sales and co-production initiatives with India. This collaboration is expected to drive technological advancements in defense manufacturing while strengthening India’s defense capabilities. Trade in arms and ammunition between the two nations has seen fluctuations over the years, but the ongoing commitment to military cooperation signals a long-term vision for strategic security and regional stability.

Energy security and civil nuclear collaboration

India and the US have reaffirmed their commitment to strengthening cooperation in these energy security sectors. One of the focus of the latest discussions was the full implementation of the US-India 123 Civil Nuclear Agreement, which includes plans for constructing US-designed nuclear reactors in India. Additionally, both countries are exploring the development of small modular reactors, a move that is expected to bolster India’s energy security while facilitating advanced technology transfers. This partnership underscores a shared vision for sustainable energy solutions and greater collaboration in the global nuclear sector.

India-US collaboration on IMEC corridor

Trump has announced that India and the US have agreed to collaborate on the development of the India-Middle East-Europe Economic Corridor (IMEC). Describing it as one of the most transformative trade routes in history, Trump highlighted that the corridor would connect India, Israel, Italy, and ultimately the US through integrated roads, railways, and undersea cables.

US to become a key energy supplier to India

During a joint press conference, Trump stated that India and the US have reached a crucial agreement on energy, positioning the US as a leading supplier of oil and gas to India. This partnership aims to enhance India’s energy security while strengthening bilateral trade in the energy sector.

Space exploration: Strengthening collaboration

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Expanding space exploration cooperation was another focal point of the India-US bilateral talks. The US has pledged its support for India’s ambitious goal of sending its first astronaut to the International Space Station (ISS) by 2025. Beyond human spaceflight, the two nations are also working together on the NASA-ISRO Synthetic Aperture Radar (NISAR) mission, which aims to map Earth’s surface using advanced dual radar technology. Further discussions explored future opportunities in satellite technology, space tourism, and advanced space manufacturing, reinforcing the growing synergy between both countries in space research and development.

India’s membership in the International Energy Agency (IEA)

In a critical step toward enhancing India’s role in global energy governance, the US has extended its support for India’s membership in the International Energy Agency (IEA). This move is poised to strengthen India’s influence in international energy policymaking and facilitate deeper engagement in shaping the global energy landscape. 

Quad cooperation and Indo-Pacific strategy

Additionally, regional security and multilateral cooperation featured prominently in the February 14, 2025, discussions, with Modi extending an invitation to Trump for the upcoming Quad Leaders’ Summit in New Delhi. The Quadrilateral Security Dialogue (Quad), which includes India, the US, Japan, and Australia, is focused on enhancing regional security through joint initiatives such as disaster response, maritime patrols, and interoperability exercises. Beyond the Quad, both leaders also discussed broader multilateral engagements, including the India-Middle East-Europe Corridor and the I2U2 Group, which aim to deepen cooperation in trade, defense, and energy.

Conclusion

The Modi-Trump bilateral meeting reaffirmed the deepening India-US partnership, characterized by mutual trust, shared strategic interests, and a commitment to global stability. The announcements made during this high-profile dialogue signal a leap forward in economic, defense, energy, and security cooperation. As both nations continue to work towards their ambitious goals, this partnership is poised to become one of the most consequential relationships in the 21st century, fostering prosperity, innovation, and security on a global scale.

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