During his Asia tour in South Korea, Trump publicly pledged to strike a major bilateral trade agreement with Narendra Modi’s India, signalling a possible thaw in long-running tariff tensions.
What Happened
- While attending the APEC Summit 2025 in Gyeongju, South Korea, Donald Trump stated that the U.S. was “going to do a trade deal with India,” and he reaffirmed his “great respect” for India’s Prime Minister.
- The remark comes amid months of stalled negotiations between the two countries, with India pushing back on U.S. demands and the U.S. raising tariffs against Indian exports.
- In earlier remarks, Indian commerce officials stressed caution, saying India does not negotiate deals “with a gun to our head.”
Why It Matters
- A concluded trade deal could reshape one of the world’s largest trading relationships and impact sectors like agriculture, technology, defence, and energy.
- India has long sought greater access to U.S. markets while protecting sensitive domestic sectors. The U.S. meanwhile wants reciprocal access and reduction of Indian tariffs.
- The public pledge by Trump adds political weight — signalling to markets and India that the U.S. is ready to move. For India, it may strengthen its negotiating leverage.
- However, despite the promise, key issues remain: tariffs, market access, defence / energy linkages, and India’s “red lines” such as farm protection and data sovereignty.
What to Watch Next
- When will formal talks or a “deal framework” be announced? Watch for official communiqués from both governments.
- What will the phases of the deal include? Likely starting with select sectors (e.g., defence, energy) and paving the way for deeper integration.
- How will Indian exporters respond if U.S. tariffs are rolled back or Indian tariffs reduced? Impact on Indian industry could be wide.
- Will India extract concessions on visas, technology transfer, or investment protection as part of the deal?
- Are there political risks on both sides (e.g., domestic opposition, elections, trade lobby push-back) that could derail the agreement?
