Trade, tariffs and immigration to be main issues of discussion during Modi's visit to US

Trade, tariffs and immigration to be main issues of discussion during Modi's visit to US
/ The White House
By bno - Mumbai bureau February 12, 2025

Trade, tariffs and immigration will be the main issues of discussion during the upcoming visit of Indian Prime Minister Narendra Modi to the US, Michael Kugelman of the Wilson Centre’s South Asia Institute in Washington wrote in a column for the BBC.

According to Kugelman, Delhi knows Trump well as many of Modi's current cabinet ministers also served during his previous term. Delhi has already indicated its willingness to reduce tariffs, take back illegal Indian immigrants and purchase American oil and gas.

India has cut some tariffs and accepted 104 undocumented Indians, with the first plane arriving in the country last week. These steps suggest that Modi is working to reduce the likelihood of tensions with the new Trump administration, Kugelman wrote.

Kugelman believes that Trump may nudge India to make more tariff reductions, to further reduce a trade deficit that now stands at close to $46bn. Trump may also ask Modi to accept more illegal immigrants. Estimates suggest that there could be about 700,000 undocumented Indians - the third-largest such group in the US. Given this, it will be a difficult and delicate issue for Delhi to navigate, Kugelman said.

India may also be asked to buy more American oil and gas. In 2021, India was the main market for American oil exports, but after the Russia-Ukraine war Delhi increased imports of cheap oil from Russia. In time this annoyed the US, particularly so with India persisting with the Russian imports even after extensive periods of US pressure to cut imports from Moscow.

In return for the increased imports of US oil and gas, Modi may in turn ask the US invest in the Indian nuclear energy sector.  During the Union Budget 2025–26 presented on February 1, the Indian government announced the launch of the Nuclear Energy Mission, aiming to develop at least 100GW of nuclear power by 2047.

In her budget speech, Finance Minister Nirmala Sitharaman said the government would establish a Nuclear Energy Mission worth INR200bn ($2.3bn) to support research and development of small modular reactors (SMRs). She also confirmed that at least five indigenously developed SMRs would be operational by 2033.

Technology cooperation is another area of interest for both countries, according to Kugelman. In 2022, both countries implemented the Initiative on Critical and Emerging Technologies (iCET), which both sides view as a new cornerstone for strategic partnership.

“Modi will likely seek assurances from Trump and his National Security Adviser Mike Waltz that they remain committed to this. Given Washington's focus on countering China by making India a bigger part of tech global supply chains, they probably will,” Kugelman wrote in the BBC column. India may also ask Washington to maintain the H-1B visa regime.

Other countries may also come up during Modi's conversations in Washington, especially Iran with which India has a close relationship.

Delhi is currently working with Tehran to develop a port in Chabahar city to strengthen connectivity with Central Asia, via Iran and Afghanistan. Recently, Washington put out a presidential memorandum which hinted at scrapping sanctions waivers for those conducting commercial activities in Chabahar. Modi may seek clarity on what this means for Delhi, Kugelman said.

 

 

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