In a significant diplomatic conversation, U.S. President Donald Trump urged Indian Prime Minister Narendra Modi to increase India’s purchase of American defense equipment. The discussion, held over a phone call on Monday, also revolved around the need for balanced bilateral trade between the two nations. Trump emphasized that trade relations should not disproportionately favor one side—a sentiment he has frequently expressed regarding U.S.-India trade dynamics.
This conversation marks the first official dialogue between the two leaders since Trump’s return to office. Previously, Modi had extended his congratulations to Trump following his election victory in November.
A Potential Meeting on the Horizon
The White House characterized the conversation as constructive, hinting at a possible upcoming meeting between the two leaders. Media reports suggest that Prime Minister Modi may visit Washington, D.C., in the coming weeks, potentially following his scheduled attendance at an Artificial Intelligence Summit in Paris in February.
According to Bloomberg, Trump told reporters aboard Air Force One, “I had a long conversation with Modi, and he is likely to visit the White House next month, probably in February.” The official statement from the White House has further fueled speculation about Modi’s impending U.S. visit.
Following the call, India’s Ministry of External Affairs released a statement affirming that both leaders are committed to strengthening mutual trust and beneficial partnerships. The discussion encompassed a broad spectrum of issues, including technology, trade, investment, energy, and defense.
The U.S. Focus: Defense Purchases and Trade Balance
While both sides echoed similar sentiments in their respective statements, the White House placed particular emphasis on two key issues: increasing India’s procurement of American defense equipment and ensuring balanced trade.
Trump has long been vocal about what he perceives as an unfair trade imbalance. He frequently refers to India as the “Tariff King” due to the high import duties imposed on American goods. During his first term, Trump revoked India’s Generalized System of Preferences (GSP) status, which had allowed duty-free exports of certain Indian products to the U.S. He justified this move by alleging that India restricted market access to American products.
Between January and November 2024, India’s trade surplus with the U.S. amounted to $41 billion, a figure that Trump has consistently sought to reduce. His administration argues that India should lower tariffs on American imports and purchase more U.S. goods to rectify the imbalance.
India’s Strategic Response
Reports indicate that the Indian government is preparing to address Trump’s concerns strategically. Bloomberg suggests that if Trump presses for tariff reductions, India might consider negotiating a trade deal.
India is reportedly open to reducing tariffs on key U.S. exports, including whiskey, steel, and oil, and may increase imports to appease American trade concerns. Furthermore, India has signaled its willingness to repatriate approximately 18,000 undocumented Indian immigrants from the U.S., an issue raised by Senator Marco Rubio during a discussion with Indian Foreign Minister S. Jaishankar.
Trump, when questioned about India’s stance on undocumented immigrants, remarked, “Modi will do what’s right.”
The Economic Power Dynamics
India’s former Foreign Secretary Kanwal Sibal weighed in on the situation, cautioning against America’s aggressive trade posture. He pointed out the stark economic disparity between the two nations: the U.S. boasts a $29 trillion economy with a per capita income of $66,000, while India’s economy stands at $4 trillion with a per capita income of just $2,400.
Sibal also highlighted that the U.S. trade deficit is predominantly with China (30%), the European Union (16%), and Canada (15%), while India accounts for only 3.2% of the American trade gap. He argued that India should not be disproportionately targeted when its contribution to the U.S. trade deficit is relatively minor.
The Push for Defense Procurement
Over the past two decades, India has significantly increased its defense procurements from the U.S. A recent example is India’s $3 billion deal for Predator drones. As India seeks to diversify its defense imports and reduce reliance on Russia, Washington sees an opportunity to deepen military cooperation.
The White House’s statement underscores America’s push for India to prioritize U.S. defense equipment over Russian alternatives. This aligns with broader strategic interests in the Indo-Pacific region, a theme that frequently surfaces in U.S.-India diplomatic engagements.
Interestingly, while the U.S. statement explicitly referenced the Indo-Pacific and the Quad alliance, India’s official statement did not, signaling potential nuances in their strategic priorities.
Strengthening Diplomatic Ties
Last week, Indian Foreign Minister S. Jaishankar attended Trump’s inauguration ceremony and met with newly appointed U.S. Secretary of State Marco Rubio. These engagements reflect ongoing diplomatic efforts to navigate the complexities of U.S.-India relations under the new administration.
As India and the U.S. recalibrate their partnership, the coming months will reveal whether both sides can find common ground on trade, defense, and strategic cooperation. Modi’s anticipated visit to the White House could be a pivotal moment in shaping the future trajectory of bilateral ties.
