International

Trump, Indian PM Seal Energy and Trade Deal Amid Tariff Clash

Published

1 month ago

Feb 14, 2025.

Dennis

US and India strike energy deal to boost oil and gas trade, reducing trade deficit.
Trump pushes for reciprocal tariffs, criticizing unfair import taxes on US goods.
India to buy US military hardware, including F-35 fighter jets, as part of defence cooperation.

US President Donald Trump has announced a new trade agreement with Indian Prime Minister Narendra Modi, under which India will increase its imports of US oil and gas to help reduce the trade imbalance between the two nations.

“They’re going to be purchasing a lot of our oil and gas. They need it. And we have it,” Trump said during a joint news briefing in Washington.

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Modi echoed the sentiment, emphasizing India’s focus on strengthening its energy security through expanded trade in oil, gas, and nuclear energy.

The announcement comes as Trump enforces a stricter stance on trade, demanding reciprocal tariffs on US trading partners, ensuring that duties imposed on American exports are matched by equivalent levies on imports.

Despite ongoing trade friction, Trump and Modi have cultivated a strong personal relationship over the years. “We’ve had a wonderful relationship,” Trump said while welcoming Modi to Washington for a two-day visit.

As part of their discussions, Trump also confirmed that the US will expand military sales to India, with plans to provide F-35 fighter jets in the near future. Immigration was another key issue, with Trump expected to press India to take back thousands of undocumented immigrants.

Modi, in a separate meeting with Tesla and SpaceX CEO Elon Musk, highlighted India’s commitment to space, technology, and innovation. “I firmly believe that with Trump, we will work at twice the speed we did in his first term,” Modi said.

Meanwhile, Trump’s administration has intensified its tariff strategy, with the president ordering his advisers to calculate new duties on trading partners that could take effect by April 1.

“Our allies are worse than our enemies when it comes to import taxes,” Trump told reporters before his meeting with Modi, arguing that the US had long been exploited by unfair trade practices.

The White House released a statement underscoring disparities in trade policies, pointing out that while the average US tariff on agricultural goods is 5% for most favoured nations (MFN), India’s average applied MFN tariff stands at 39%. The document also noted that India imposes a 100% tariff on US motorcycles, while the US levies just 2.4% on Indian motorcycles.

Despite warnings from economists that escalating tariffs could drive up consumer prices, Trump defended his strategy, insisting that it would ultimately bolster American manufacturing and job creation.

“Prices could go up somewhat in the short term, but they will also go down,” he said, asserting that his policies would result in a “flood of jobs” for American workers.