Modi-Trump meeting: Trade, tariffs and tech ties

Prime Minister Narendra Modi’s visit to Washington DC to meet US President Donald Trump was billed as a high-stakes diplomatic engagement. With discussions ranging from trade and defence to immigration and energy cooperation, both leaders sought to strengthen ties while navigating pressing issues such as tariffs and technology transfers.

Foreign policy expert Sridhar Krishnaswamy and The Federal’s Editor-in-Chief S Srinivasan break down the significance of this visit and its implications for India-U.S. relations.

Trade Talks: A Balancing Act

A major highlight of the visit was trade. Trump, known for his transactional approach, praised India’s economic growth while simultaneously pressing for a reduction in the US-India trade deficit. Currently, the two nations engage in $157 billion worth of trade, but the US runs a deficit against India.

Srinivasan pointed out that Trump’s tariff strategy is part of his broader negotiation tactics. "Even as Modi landed, Trump slapped India with new tariff threats. But Indian officials were prepared, knowing Trump's style from his first term."

Trump is pushing India to buy more American goods, including defence equipment and energy products. However, experts warn that one-time purchases won’t solve trade imbalances.

"The US tried this approach with Japan in the '80s, and it failed," said Krishnaswamy. "Structural issues in trade can’t be offset by just selling more fighter jets or gas supplies."

Defence Deals: The F-35 Dilemma

One of the most debated topics was India’s potential purchase of the F-35 fighter jets from Lockheed Martin. While the US is willing to sell, India faces challenges, particularly technology transfer (ToT) and long-term maintenance costs.

Krishnaswamy warned: "Buying American defence equipment comes with strings attached—spares, operational restrictions, and the risk of legislative roadblocks from the US lawmakers."

He pointed out that Russia, unlike the US, has historically been more open to tech transfers, making the Su-57 a more attractive option for India’s defence strategy.

Immigration: The H-1B Visa Question

Another key issue was the US immigration policy, particularly the status of H-1B visa holders and deportation of illegal Indian immigrants. Modi assured Trump that India is ready to take back its undocumented citizens, a move that plays well politically for both leaders.

However, as Krishnaswamy noted, the logistics are daunting. "Out of 800,000 illegal Indians, only 18,000 have reached final deportation orders, and just 104 have been sent back so far. The process will take years."

Meanwhile, Indian professionals are keenly watching the future of H-1B visa allocations and green card quotas, but no immediate breakthroughs were announced.

Energy & Business: India’s Tesla Opportunity

Energy cooperation and business investments were also part of Modi’s agenda. The meeting with Tesla CEO Elon Musk sparked interest, particularly in electric vehicle (EV) manufacturing in India.

Srinivasan observed: "Musk is pushing for Tesla’s entry into India, but the Indian government wants local manufacturing. It’s a negotiation in progress."

There was also discussion on India diversifying its energy imports, including sourcing more natural gas from the US, but pricing remains a key hurdle.

Extradition of Tahawwur Rana: A Political Win for Modi

A major diplomatic takeaway was the US approving the extradition of 26/11 terror accused Tahawwur Rana. This is a significant win for Modi, aligning with his strong stance on counterterrorism.

Srinivasan explained: "For Modi, getting Rana back is a symbolic victory. It strengthens his narrative on tackling terrorism and distinguishes his government from previous regimes."

A Transactional Relationship?

While both leaders projected a “Mega Partnership” between the US and India, experts caution that the relationship remains transactional.

"Trump is a businessman first. He wants better trade deals, military sales, and reduced deficits. India, meanwhile, must safeguard its strategic interests," said Krishnaswamy.

With pressing issues like tariffs, defence purchases, and immigration still unresolved, the real impact of this visit will unfold in the coming months.

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