PM Modi calls India, US natural allies after Trump’s trade overtures

Amid escalating trade frictions, President Donald Trump on Wednesday announced that the US and India were “continuing negotiations” to resolve longstanding trade barriers and expressed optimism about finalising a bilateral trade pact announced in February, with Prime Minister Narendra Modi terming the two countries “close friends and natural partners”.

“I am pleased to announce that India and the US are continuing negotiations to address the trade barriers between our two nations,” Trump wrote on Truth Social. “I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our great countries!”

The announcement marked a notable shift in tone from Trump’s earlier criticism of India as a totally “one-sided disaster” in trade relations, particularly following the imposition of 50 per cent tariffs on Indian exports in late August. The tariffs, including 25 per cent for trade imbalance, effective from August 1, and an additional 25 per cent penalty for India’s purchases of Russian oil, had strained bilateral ties and threatened nearly 50 per cent of India’s $86.5-billion merchandise exports to the US.

Modi responded swiftly, emphasising the “limitless potential” of the India-US partnership. He also asserted that both sides were working to conclude the discussions at the earliest.

“India and the US are close friends and natural partners. I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership. I am also looking forward to speaking with President Trump. We will work together to secure a brighter, more prosperous future for both our peoples,” Modi said on X. The trade pact was announced in February with an objective to double the bilateral trade to $500 billion by 2030. So far, five rounds of talks have been completed and the sixth round of negotiations, scheduled for August 25-29, was postponed following the US President’s 50 per cent tariff on Indian goods. Disagreements over market access, particularly in India’s agriculture and dairy sectors, and the US demand to halt Russian oil imports have delayed the progress. Media reports suggest that Indian negotiators may visit the US for trade talks next week, though the Ministry of Commerce has not confirmed any such schedule.

As signs of a reset emerged after weeks of friction, the Indian stock market trended positively on Wednesday, with the Nifty 50 rising 0.42 per cent to close at 24,973 and the Sensex gaining 0.4 per cent to close at 81,425.

Commerce and Industry Minister Piyush Goyal confirmed that India was in active dialogue with the US for trade negotiations. Speaking at FICCI LEADS-2025, Goyal also noted that a trade pact with Oman was likely to be concluded within weeks and that negotiations with the European Union were on the fast track. An EU team is currently in New Delhi for the 13th round of talks with Indian counterparts.

Interestingly, the developments come amid US media reports claiming Trump urged the EU to impose 100 per cent tariffs on India and China over their Russian oil purchases. The reports also suggested the US was prepared to mirror any tariffs imposed by India.

The 50 per cent US tariffs are projected to significantly impact labour-intensive sectors such as textiles, machinery, leather and MSMEs.

Meanwhile, senior Congress leader Jairam Ramesh questioned Modi’s remarks describing India and the US as “natural partners”, pointing to repeated claims by Trump that he had brokered a ceasefire between India and Pakistan.

“...Are they so natural that Trump has declared on over 35 occasions that he brought about the India-Pakistan ceasefire…,” Ramesh posted on X.