Following a meeting last Thursday, February 13th between Donald Trump and Indian Prime Minister Narendra Modi, India and the US agreed to begin talks on a bilateral trade deal that could help resolve the countries’ standoff on tariffs.
Ahead of the meeting last week, White House officials signaled the Trump Administration’s desire to bring down the U.S. trade deficit with India via a bilateral trade deal in 2025, also emphasizing a goal of increasing defense sales. In the lead-up to the meeting, Trump also announced plans for reciprocal tariffs on many countries, including India.
In the wake of last Thursday’s meeting between the two leaders, a joint statement announced that the US welcomed recent steps by India to lower tariffs on some U.S. products and increase market access for U.S. farm products. The statement expressed a desire to agree on initial segments of the trade deal by fall 2025, echoing earlier goals to have a deal done in calendar year 2025. India, for its part, pledged to purchase more U.S. oil, gas, and military equipment, echoing the White House’s optimism with India Foreign Secretary Vikram Misri stating, “we have a way forward.”
These concessions on certain tariffs, along with pledges to step up energy and defense imports, come amidst concern from the Indian exports sector that Washington’s reciprocal tariffs could impose steep costs on the Indian economy. Citi Research analysts on Tuesday estimated potential losses of $7 billion per year.