Modi-Trump meeting: Tariffs, trade and visas to dominate talks

There will be warm smiles and laughs when Indian Prime Minister Narendra Modi travels to Washington for a meeting with President Donald Trump after this week. But that won’t be the end all.

Over the years, Trump and Modi have maintained a close relationship, which has included frequent looks and high-profile sessions.

Their relationship has grown since their first conference in Washington in 2017 through mutual looks at large demonstrations in Houston and Ahmedabad. Their science is the result of their shared worldviews and political views, as well as a mutually corporate desire to combat China, a issue that has also strengthened the wider US-India partnership.

Not surprisingly, Trump has generally criticised India, but he has never criticised Modi.

And so, during Modi’s visit, the two leaders will probably spend time mapping out next steps in the US-India strategic partnership, which is already in a good place.

Modi will presumably join several members of Trump’s case, as well as US company leaders and members of the Indian-American neighborhood.

Elon Musk, the Tesla CEO, and SpaceX may also be in his sights. Modi, eager to level up India’s burgeoning electric cars business, may be glad if Musk opened a Tesla factory in India.

And yet the Trump-Modi bonhomie and intoxicating talk of strategic agreement may face a disturbing fact: during Modi’s visit, the relationship’s interpersonal side will come into sharp relief with each leader, particularly Trump, armed with an array of demands.

Delhi knows Trump well. Many of Modi’s current cabinet ministers also served during his previous term, which overlapped with part of the first Trump administration. That familiarity has been on display since Trump’s inauguration last month: Delhi has publicly signalled its willingness to lower tariffs, take back undocumented Indian immigrants and buy American oil.

It has already lowered some tariffs and taken back 104 undocumented Indians, with the first plane arriving in India last week. These pre-emptive steps are meant to prevent Trump from making specific demands of India and to reduce the likelihood of tensions with the new Trump administration.

Still, Trump may ask Modi to make additional tariff reductions, to further chip away at a US goods and services trade deficit with India that has approached $46bn (£37.10bn) in recent years. But an obstacle could become an opportunity: Modi may call on Trump to enter into bilateral talks on an economic partnership accord meant to reduce tariffs on both sides.

In recent years, Delhi has shown a growing willingness to pursue trade deals. The Trump administration may prove to be a more willing interlocutor than the Biden administration, which imposed heavy environmental and labour-related conditions on new trade agreements.

Trump may also ask Modi to take back more undocumented Indians. Given that some estimates put the number at more than 700,000 – the third-largest such group in the US – this will be a difficult and delicate issue for Delhi to navigate.

Last week, India’s Foreign Minister S Jaishankar told parliament that the government was working with the US to ensure Indian citizens were not mistreated while being deported after reports of them being shackled sparked anger.

Trump may also ask Modi to purchase more American oil.

In 2021, India was the top destination for American oil exports, but the Russian invasion of Ukraine brought major changes in global oil markets and prompted Delhi to ramp up imports of cheap oil from close partner Russia. The price point will determine how much oil India is willing to buy from the US.

Modi may also come with his own energy ask: invest in Indian nuclear energy. Delhi is amending its nuclear liability law and has announced a new nuclear energy mission, in an attempt to sharpen international interest in the fuel.

By 2030, India plans to use renewable energy to meet half of its energy needs. A potential happy medium exists when Trump is asked to invest in nuclear fuel because it is cleaner than fossil fuels but very different from solar and wind power, which may not appeal to the Trump administration as an attractive investment.

Technology will likely also be discussed.

This was a fast-growing space for bilateral relations in the Biden era, thanks to the 2022 implementation of the Initiative on Critical and Emerging Technologies (iCET), which both sides view as a new cornerstone for strategic partnership. iCET is meant to be directly overseen by the two national security advisers – to avoid getting bogged down in bureaucracy – which means they must each be personally invested in it.

Trump and his National Security Advisor Mike Waltz will likely ask for assurances that they will continue to support this. They are likely to do so given Washington’s efforts to combat China by integrating India into more of the global supply chains for technology.

Also on the tech co-operation front, Modi may make a pitch for Trump to maintain the H-1B visa regime. These visas for highly skilled foreign workers, heavily criticised by some influential Trump supporters, have been awarded to large numbers of Indian tech employees in the US.

Other countries may also come up during Modi’s conversations in Washington. Iran might loom particularly large.

Delhi is partnering with Tehran to develop a port in Chabahar city – part of a broader Indian strategy to strengthen connectivity links with Central Asia, via Iran and Afghanistan. But last week, the US administration released a presidential memorandum outlining Trump’s “maximum pressure” campaign on Tehran, which hints at removing sanctions waivers for those conducting commercial activities in Chabahar. Modi may seek clarity on what this means for Delhi.

Trump may also gauge Modi’s position on ending the wars in Gaza and Ukraine, which is a top foreign policy priority.

Delhi is a strong supporter of these waning wars. Trump’s position on the conflict in Ukraine is echoed by Modi’s call for an end to it without praising Putin or Russia.

India’s close ties to Israel and its special relationship with Russia may prompt Trump to consider whether Modi would want to play a third-party mediator as well. Modi would likely be at ease doing so if the parties are open to mediation from outside.

However, both leaders will want to keep a positive tone despite some potentially delicate discussions this week.

In that regard, the Indo-Pacific Quad will be just what the doctor ordered.

Trump supports this group, which includes US, India, Japan, and Australia, with an emphasis on halting Beijing.

The Quad’s annual meetings were elevated to the level of the foreign minister in his first term, while Biden and Trump both moved up to the leadership level.

Modi may invite Trump to Delhi to attend this year’s Quad meeting because India is scheduled to host it.

Trump reportedly is not a big fan of international travel but India is a trip he will probably be keen to make – to deepen his personal relationship with Modi and to advance a multifaceted bilateral partnership that extends well beyond the transactionalism that will carry the day in Washington this week.

The South Asia Institute at the Wilson Center in Washington is led by Michael Kugelman.

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