New defence cooperation framework, pledge to clinch trade deal likely outcome of Modi-Trump meeting

A new framework for defence cooperation to set the stage for India to buy more weapons from the United States as well as a pledge to conclude a bilateral fair-trade deal by the end of the year are among the expected outcomes of Prime Minister Narendra Modi’s meeting with President Donald Trump in Washington DC.

Modi is set to meet Trump at the White House early on Friday (Indian Standard Time). New Delhi is set to slash import duties on several items, including high-end motorcycles, electronics, medical and surgical equipment, and chemicals, to boost US exports to India and avoid a trade war with the Trump Administration. Besides, India is also planning to buy more Liquefied Natural Gas (LNG) and military hardware, including combat vehicles, from the US, according to diplomatic sources in New Delhi and Washington DC.

Trump’s National Security Advisor Michael Waltz and Director of National Intelligence Tulsi Gabbard called on Modi at the Blair House in Washington DC ahead of the meeting between the two leaders. Trump’s close aide and Tesla CEO Elon Musk, who now heads the newly created US Department of Government Efficiency, also called on the prime minister on Thursday, along with three of his children and his partner Shivon Zilis.

“Defence, technology and security are important aspects of India-USA ties, and we had a wonderful discussion around these issues. There is strong potential for cooperation in sectors like AI, semiconductors, space and more,” Modi wrote on X after meeting Waltz. He and Gabbard exchanged views on “regional and global developments of mutual interest, reaffirming their commitment to a secure, stable, and rules-based international order”, according to the Ministry of External Affairs.

“We discussed various issues, including those he is passionate about such as space, mobility, technology and innovation. I talked about India’s efforts towards reform and furthering ‘Minimum Government, Maximum Governance’,” Modi posted on X after meeting Musk. He also posted his pictures with the family of Musk.

The Modi-Trump meeting, however, is unlikely to lead to Washington DC easing pressure on New Delhi in connection with the alleged role of a former official of India’s external intelligence agency, Research and Analytical Wing, in the plot to assassinate Khalistani Sikh extremist Gurpatwant Singh Pannun, a US citizen, in New York.  

Trump has been complaining about India’s high tariff on exports from the US since the days of his first term in the Oval Office, notwithstanding his bonhomie with Modi publicly displayed at the “Howdy! Modi” event in Texas in September 2019 and its sequel “Namaste! Trump” in Ahmedabad in February 2020. He even called India a “tariff king” and “a big abuser” in its trade relations with the US.

The US goods imports from India totalled $87.4 billion in 2024 – 4.4% or $3.7 billion more than in 2023. India imported goods worth $41.75 billion from the US in 2024. India was the destination of 2.02% of exports in 2024. The US goods trade deficit with India was $45.6 billion in 2024, an increase of $2.3 billion (5.3%) over 2023.

Trump’s recent executive order imposing a 25% import duty on all steel and aluminium exports to the US from all countries may not have any significant impact on India. But with his tariff threats continuing to loom large over India, Modi is likely to convey to Trump that New Delhi would substantially cut the import duty on several items to help raise US exports to India.

Modi and Trump are likely to discuss the relaunch of the negotiation and conclude the trade deal by the end of 2025.

When Trump had his first phone call with Modi after his inauguration on January 20, he nudged the prime minister to raise India’s energy imports and defence procurement from the US to ensure balanced trade relations between the two nations.

India has contracted for more than $20 billion worth of US-origin defence articles since 2008, according to a report by the US Congress.

India was the destination of 9.8% of major conventional weapon exports globally between 2019 and 2023 and hence was the world’s largest arms importer during the period, according to a report of the Stockholm International Peace Research Institute. Russia remains the top seller of arms to India. But the deliveries from Russia to India dropped from 58% during 2014-2019 to 36% between 2019 and 2023. The US was the third biggest source of weapons procured by India during the 2019-23 period, accounting for 13% of the country’s total imports. 

The erstwhile Joe Biden’s administration in 2024 notified the US Congress of the potential sale of weapons worth $5 billion – marking a substantial increase from $2.5 billion in 2021. The latest big-ticket defence deal was clinched on October 15, 2024, when the $3.5 bn contract for India to procure 31 MQ-9B drones manufactured by General Atomics of the US was concluded. Trump’s nudge to New Delhi to buy more weapons from the US indicated that Washington DC would continue to press India to lessen its dependence on Russia for advanced military hardware.

The Modi-Trump meeting is also likely to see Washington DC nudging New Delhi for greater access for US agricultural products to the markets in India.