Trump announces energy deal with India following talks with Modi

Highlights 

• India to increase US oil and gas imports to reduce trade deficit.  
• US plans to sell F-35 jets to India, boosting defence ties.  
• Trump insists on reciprocal tariffs to counter India's high duties.  
• Talks included Indo-Pacific security, China rivalry, and India-Russia ties. 

US President Donald Trump has announced a new energy deal with Indian Prime Minister Narendra Modi, under which India will increase its imports of US oil and gas. 

The agreement is part of a broader effort to reduce the trade deficit 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.  

Prime Minister Modi emphasised the importance of energy security for India, stating, "In order to ensure India's energy security, we will focus on trade in oil and gas." He also pledged to enhance investments in nuclear energy as part of India's long-term energy strategy.  

The announcement came during Modi's two-day visit to the US, as Trump ordered reciprocal tariffs on US trading partners to counter import taxes imposed on American exports.  

Despite past trade tensions, Trump and Modi displayed a strong personal bond. 

"We've had a wonderful relationship," Trump said while welcoming Modi to Washington on Thursday.  

The two leaders also discussed defence cooperation, with Trump revealing that the US would increase its sales of military equipment to India, including plans to supply Delhi with F-35 fighter jets.  

Immigration issues were also on the agenda, with Trump expected to request India to repatriate thousands of undocumented immigrants currently in the US.  

Additionally, Modi highlighted discussions on space, technology, and innovation during a meeting with Elon Musk, a close ally of Trump. 

"I firmly believe with Trump we will work with twice the speed we did in his first term," Modi stated.  

Shortly before the bilateral meeting, Trump instructed his advisers to calculate new tariffs on US trading partners worldwide, warning that the tariffs could be implemented by 1 April.

Denouncing India tariffs, Trump agrees to trade talks

The offer emerged from the two leaders' White House talks, just hours after Trump railed against the climate for American businesses in India and unveiled a roadmap for reciprocal tariffs on every country that puts duties on US imports.

"Prime Minister Modi recently announced the reductions to India's unfair, very strong tariffs that limit us access to the Indian market, very strongly," Trump said. "And really it's a big problem I must say."

The leaders agreed to work towards a deal to resolve the trade concerns. Such a deal could be done within the next seven months, said India's Foreign Secretary Vikram Misri after the meeting. A senior Trump administration official said a deal could be reached as soon as this year.

Some of the leaders' agreements are aspirational: India wants to increase by "billions of dollars" its purchases of US defense equipment, including fighter jets, and may make Washington the "number one supplier" of oil and gas, Trump said at a joint press conference with Modi.

And Delhi wants to double trade with Washington by 2030, Modi said. Long-planned cooperation on nuclear energy, also discussed by the leaders, faces ongoing legal challenges.

"We're also paving the way to ultimately provide India with the F-35 stealth fighters," said Trump.

Misri, the Indian official, later said the F-35 deal was a proposal at this point, with no formal process underway. The White House did not respond to a request for comment on any deal.

Although Trump had a warm relationship with Modi in his first term, he again on Thursday said India's tariffs were "very high" and promised to match them, even after his earlier levies on steel and aluminum hit metal-producing India particularly hard.

"We are being reciprocal with India," Trump said during the press conference. "Whatever India charges, we charge them."

Modi vowed to protect India's interests.

"One thing that I deeply appreciate, and I learn from President Trump, is that he keeps the national interest supreme," Modi said as he sat alongside Trump in the Oval Office. "Like him, I also keep the national interest of India at the top of everything else."

The two leaders praised each other and agreed to deepen security cooperation in the Indo-Pacific, a thinly veiled reference to competition with China, as well as to start joint production on technologies like artificial intelligence.

Asked before the meeting about the steps India was taking, one source described it as a "gift" for Trump designed to lower trade tensions. A Trump aide said that the president sees defense and energy sales to India lowering the US trade deficit.

It's not clear whether the case of billionaire Gautam Adani came up in the talks after his indictment by the US Justice Department in November over an alleged bribery scheme. Adani hails from Modi's western state of Gujarat and his Adani Group runs several key infrastructure projects across the globe.

Opponents and critics often allege the meteoric rise of Adani's ports-to-energy empire was partly due to his close relations with, and favorable treatment by, administrations run by Modi's BJP and its allies. The duo have repeatedly denied impropriety.

On Thursday, Modi, irked by a question from a reporter on whether he discussed Adani with Trump, said countries don't meet to discuss such topics.

WHAT TRUMP WANTS

Tariffs will continue to dominate the two countries' relationship, said Richard Rossow, head of the India program at the Center for Strategic and International Studies, a think tank.

"It's going to be a boxing match," he said. "India is willing to take a few hits, but there's a limit."

The US has a $45.6 billion trade deficit with India. Overall, the US trade-weighted average tariff rate has been about 2.2%, according to World Trade Organization data, compared with India's 12%.

Trump wants more help from India on unauthorized immigration. India is a major source of immigrants to the United States, including a large number in the tech industry on work visas and others in the US illegally.

The United States approved the extradition of a suspect in the 2008 extremist attacks in India's financial capital Mumbai in which over 160 were killed, Trump said.

Modi met with Elon Musk on Thursday at Blair House, where the prime minister is staying opposite the White House. Musk is a key Trump ally and his Starlink company's bid to enter the South Asian market could come up for discussion.

India may prove critical to Trump's strategy to thwart China, which many in his administration see as the top US rival. India is wary of neighboring China's military buildup and competes for many of the same markets.

Modi also worries that Trump could cut a deal with China that excludes India, according to Mukesh Aghi, president of the US-India Strategic Partnership Forum lobbying group.

Trump said on Thursday that he hoped to be of help in resolving skirmishes on the India-China border.

India has continued its ties with Russia as it carries out its war with Ukraine. India has remained a major consumer of Russian energy, for instance, while the West has worked to cut its own consumption since the war started.

"The world had this thinking that India somehow is a neutral country in this whole process," said Modi. "But this is not true. India has a side, and that side is of peace."