Soutik Biswas and Nikhil Inamdar
BBC News, Delhi
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Modi and Trump have a strong personal relationship – but analysts say that the challenges await us
Despite the media threshing, the first visit of Indian Prime Minister Narendra Modi in Washington under the second term of Donald Trump was a sober and first in business – unsurprising affair for a working visit, which does not have the pump of a state visit.
Trump announced expanded American military sales in India from 2025, including F-35 jets, as well as an increase in oil and gas exports to reduce trade deficit. The two parties agreed to negotiate a trade agreement and finalize a new defense executive.
He also confirmed that the United States had approved the extradition of Tahawwur Rana, a Chicago businessman accused of playing a role in the 2008 terrorist attack in Mumbai.
“It’s a lot of deliverables for an administration of less than a month,” said Michael Kugelman of the Wilson Center’s South Asia Institute in Washington
“Overall, the two parties seem comfortable to continue the collaborations of the Biden era, especially in technology and defense, although many are renowned under Trump.”
However, major challenges await us. Here are the main points to remember:
Has India dodged the reciprocal tax ball?
Modi’s visit came while Trump ordered that American trade partners are faced with reciprocal prices-Import Taxes Tit-For-Tat to correspond to similar rights already billed by these countries on US exports. He ordered advisers to write new prices on American trade partners, warning that they could take effect on April 1.
India has a trade surplus with the United States, its best trading partner. India has reduced the average tariffs from 13% to 11% in its federal budget in order to pre -empt Trump’s pricing movements.
The jury is determined to know if India seems to have dodged pricing shocks for the moment.
Ajay Srivastava, founder of the Think Tank Global Research Institute (GTRI), based in Delhi, says that he sees no “problem with the prices”.
The main reason, he says, is that 75% of American exports to India attract import taxes below 5%.
“Trump indicates that extreme prices of aberrant values like 150% on certain articles, but it is not the norm. India has little reason to fear reciprocal prices,” Srivastava told BBC.
Abhijit Das, former chief of the center for WTO studies at the Indian Foreign Trade Institute, is not convinced.
“The devil lies in details. Reciprocal prices do not only reflect India import taxes-other factors come into play,” he told BBC.
Trump’s approach could go beyond import rights, taking into account the value added tax (VAT), non-tariff obstacles and commercial restrictions. While the Indian tax on products and services (TPS) on imported goods are aligned with WTO rules, Trump can always use it to justify higher prices.
A memo of the American government on reciprocal prices alludes to this strategy, invoking the costs of American companies of non -pricing obstacles, subsidies and heavy regulations abroad. He also cites VAT and government supply restrictions as non -tariff barriers.
AFP
Indian and American soldiers recalling a helicopter during a joint exercise in Rajasthan – Trump says that it wants India to buy more American weapons
DAS says that the United States should put pressure on access to the Indian public procurement market, which is currently protected by WTO rules.
“This will hinder India’s ability to prioritize national producers, posing a direct challenge on the” Make in India “initiative. This is certainly not good news for us.”
Mr. Das suggests that India should counter Trump’s reciprocal tariff logic, especially in agriculture where the United States imposes strict non-pricing barriers that restrict Indian exports such as maximum rigid residue limits for chemicals .
He argues that since the United States “subsidizes” its agricultural sector “subsidize” strongly, India should highlight these subsidies to repel American claims.
Prices alone may not help fill the trade deficit between the two countries. Defense and energy purchases will in some way tackle the deficit, according to experts.
Double the United States-India at $ 500 billion by 2030
The new commercial objective of $ 500 billion (400 billion pounds Sterling) is aimed at more than double the trade of $ 190 billion between the two countries in 2023.
Modi and Trump have undertaken to negotiate the first phase of a trade agreement by fall of 2025. Discussions will focus on market access, pricing reductions and the integration of the supply chain between goods and services.
“The announcement that the two parties will continue a trade agreement gives India the opportunity to negotiate reduced prices on both sides. It would be a boon not only for the American-Indian relationship, but also for an Indian economy which has Strung in recent months, ”explains Mr. Kugelman.
What is not clear is what type of trade deals with both parties will aim.
“What is this commercial agreement? Is this a complete free trade agreement or is it a reciprocal rate agreement?” M. Srivastava M. Srivastava.
Mr. Das thinks that we will have to wait for the details of the trade agreement.
“This does not necessarily mean a free trade agreement – if that were the case, it would have been explicitly stated. This could simply imply tariff reductions on certain products of mutual interest.”
Priyanka Kishore, principal economist of the Singapore consulting company, Asia Decoded, says that $ 500 billion is a “high target but there are low suspension fruits that we can immediately exploit”.
“For example, American sanctions on the Russian shadow fleet will soon come into play, so that India can easily rotate in the United States for more oil. It will not be too difficult.”
Trump said at the joint press conference that the United States would hope, the leading supplier of India oil and gas.
US defense offers of several billion dollars, including fighter planes
India’s defense trade with the United States has increased from nearly $ 20 billion to zero, making the United States its third weapon supplier.
While Russia remains the main source of India, its share increased from 62% to 34% (2017-2023) while India is heading for American purchases.
In a major announcement to deepen defense ties, Trump said that the United States would increase sales of military equipment in India “by several billion dollars from this year” or finally pave the way to supply aircraft Furtive war F-35.
But it will be easier to say than to do, say experts.
“It seems good, but it can be to put the cart in front of the horse,” explains Mr. Kugelman.
Despite the increase in American weapons sales in India, bureaucratic obstacles and export controls limit the transfer of sensitive technologies, he said. The new defense executive announced at the summit can help meet these challenges.
India does not “take the F-35 offer seriously” due to high maintenance requests, explains strategic business expert Ajai Shukla.
Shukla notes that American weapons transactions are accompanied by challenges – private companies prioritize the profit compared to long -term partnerships.
However, with delays and cost-effects affecting some of India’s arms agreements with Russia, Delhi’s defense ties with the United States has been deepened.
Reuters
Modi met Elon Musk to discuss AI and emerging technology
Modi Meet Musk even as Tesla India still provides in limbo
Modi met Tesla CEO Elon Musk, to discuss AI and emerging technology, the Indian Foreign Ministry said.
We do not know if they have approached Musk’s plans for the launch in Starlink’s India or the entry of the Tesla market.
Musk put pressure for a direct spectrum allowance, confusing himself with the Indian billionaire Mukesh Ambani, who promotes auction. His license remains under examination.
India also courts Tesla to create a car factory, reducing EV import taxes for car manufacturers committing $ 500 million and local production in the three years. Tesla has not yet confirmed her plans.
Reuters
Modi joined Trump at a press conference, answering two questions
Take questions – a rare departure for Modi
In a rare decision, Modi joined Trump at a press conference, answering two questions – about illegal immigration and corruption accusations of the United States Ministry of Justice (DoJ) against the Adani group.
Indian billionaire Gautam Adani, accused of close links with Modi, was accused of fraud in the United States last November on an alleged corruption program of $ 250 million.
Modi said he had not discussed the question with Trump. On immigration, he said that India was ready to take over illegal, verified Indian migrants.
It was only the third Q & R of Modi’s direct press in his mandate almost 11 years as an Indian Prime Minister. He never held a solo press conference. In 2019, he sat next to the president of the Amit Shah party while Shah answered all the questions and in 2023, he only answered two questions alongside the former president Joe Biden.
