PM Modi’s US Visit: Key Issues in India-US Relations Under Trump’s Second Term

Prime Minister Narendra Modi is set to visit the US on February 13, an “official working visit”, becoming only the third foreign leader to be hosted by the White House after President Donald Trump took office on January 20, 2025. This is the earliest visit by an Indian Prime Minister in the presidency of any US President in recent memory, which points to the strengthening of ties between India and the US in the past decades. It seems to indicate that the Modi-Trump bonhomie, a significant factor in Trump’s first term, might continue.

The visit, however, comes at a time when President Trump, in his second term, is looking to revisit many existing global frameworks, trade relationships, and also America’s engagement in world conflicts. Many of these issues have a direct bearing on India. It would, therefore, be interesting to see how India navigates these changes and manages to maintain a strong relationship with the US, a strategically important bilateral partnership.

Before Modi’s visit to the US could be confirmed, the deportation of 104 illegal Indian migrants from the US kicked off a political storm in India. It was not merely the act of deportation but how they were deported, chained, shackled, and set home in a military aircraft, which put the government on the defensive, forcing it to assure the public and the families that they would take up the issue with the US authorities for a “more dignified deportation” in the future.

Trade and tariffs

There are many other issues too that the Modi government will have to navigate with the new Trump administration skilfully, trade and tariffs primary among them. Trump has threatened to increase tariffs on all nations including India, as he feels that the US has been the target of unfairly high tariffs. He also uses the threat of tariffs as a political tool to settle political scores with rivals. The US has already imposed 25 per cent tariffs on goods from Mexico and Canada and an additional tariff of 10 per cent on goods entering from China.

In the context of India, Trump has often called India a “tariff king” and a “big abuser” of trade ties. The US might impose higher tariffs on Indian exports such as textiles and pharmaceuticals. A warning of sorts was clear after the recent telephone call between Trump and Modi, a statement of which from the White House stated: “The President emphasized the importance of India increasing its procurement of American-made security equipment and moving toward a fair bilateral trading relationship.”

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The US is India’s largest destination for merchandise exports, accounting for more than 18 per cent in value. India exported goods worth $77.5 billion to the US in 2023-24, which was more than the cumulative value of goods exported to the next three big destinations. India currently enjoys a trade surplus with the US, and Trump wants India to buy more as well as impose lower tariffs on American goods. 

In what seems a pre-emptive move, India has slashed import duties on motorcycles, cutting tariffs on heavyweight bikes with engines above 1,600cc from 50 per cent to 30 per cent, and on smaller ones from 50 per cent to 40 per cent, during the presentation of the Budget on February 1. This is in continuation with a key demand from the Trump administration right from the first term, where Trump criticised 100 per cent duty on Harley motorcycles as “unacceptable” and an unfair trade practice. This threat of tariffs will definitely be a key point of discussion during the forthcoming visit.

Chabahar Port issue

There is another crucial aspect of trade policy announcement that will be of huge concern to India. In his decision to re-impose the “maximum pressure” policy on Iran, the Chabahar port in Iran has been specifically mentioned in the Presidential National Security Memorandum (PNSM-2) of February 4, stating that the US will modify or rescind sanction waivers that provide any degree of economic or financial relief to Iran, including those related to Iran’s Chabahar port.

If applied to India, this would be a significant setback for two reasons. Firstly, even in Trump’s first term when the sanctions were imposed on Iran, Chabahar port was granted an exemption due to India’s engagement there. Secondly, in May 2024, India signed a 10-year agreement to operate the Chabahar port and develop it further.

As a follow-up to the PNSM, the US Department of Treasury Office of Foreign Assets Control (OFAC), in its order of February 6, has already announced sanctions against many Indian entities engaged with the Chabahar port directly or indirectly in transporting oil and other goods from Iran. Unlike the first time when India agreed to stop the import of Iranian crude oil from May 2019 onwards, it will be interesting to see if India is willing to let go of exemptions in its Chabahar port engagement or whether India will defy US sanctions and continue its operations and development of Chabahar port, as it did with the import of Russian oil after the war in Ukraine broke out in February 2022, defying the threat of US sanctions.

Chabahar Port has one more critical connection: India’s engagement in Central Asia and Afghanistan. Most of its humanitarian assistance to Afghanistan flows through Chabahar port and then onwards through the Delaram-Zaranj highway. Also, many Indian exports to Armenia, including defence exports that take the route through the port, could be adversely affected.

Afghanistan and Gaza

In the context of Afghanistan, India has given indications that it wants to revisit its ties with the Taliban government in Afghanistan, heralded by the meeting between India’s Foreign Secretary, Vikram Misri, and Afghanistan’s acting Foreign Minister, Mawlawi Amir Khan Muttaqi, in Dubai on January 8, 2025, the first high-level interaction between the two countries since the Taliban’s return to power in August 2021. However, how the US is planning to engage with the Taliban government in Afghanistan is still not clear. President Trump has made it clear that future financial assistance to Afghanistan will be contingent upon the return of US military equipment by the Taliban government in Kabul, a demand which was promptly rejected by the Taliban. How this will play out in the future and whether Trump will impose more economic sanctions on Afghanistan, many of which may have adverse effects on India’s assistance and projects in Afghanistan, will also be an issue to watch out for.

The ongoing war in Gaza and the recent pronouncements by the US of “cleaning out Gaza” and “taking over Gaza” should be of concern to India, which has maintained a consistent policy on Palestine’s right to be an independent and viable state. Coupled with Trump’s statements on the Panama Canal and Greenland, what should worry India is whether “might is right” and “winner takes all” could become the accepted norm in the international order. This would also grossly undermine the global order since the end of World War II as well as the legitimacy of global institutions like the UN.

If it happens, will China then be within its rights to take over Taiwan, or Russia to continue its war in Ukraine indefinitely, or can Israel and the US plan to take over Gaza and the West Bank permanently? Although India is not directly affected in any of the cited examples, it provokes a larger question in terms of territorial integrity, the evolving of the global order, and India’s stance on it as an emerging global power.

US withdrawal from international organisations

The current Trump administration has taken a tough call on many international organisations too. It has withdrawn from the WHO, accusing it of mismanaging the COVID-19 pandemic and succumbing to political pressure. It has withdrawn from the United Nations Human Rights Council, accusing it of adopting biased policies against Israel. It has stopped all US funding for the United Nations Relief and Works Agency for Palestine Refugees in the Near East, citing its alleged links to Hamas. President Trump has also threatened to withdraw from the WTO, accusing it of favouring other nations at the US’ expense. It has also sanctioned the International Court of Justice for anti-Israel actions.

The Trump administration has also threatened the BRICS, of which India is a key member, of 100 per cent tariffs if they adopt anti-US policies, especially with regard to ditching the US dollar in trade and coming up with a “BRICS currency”. Although India has consistently denied any move towards a BRICS currency, many nations in the BRICS have advocated bypassing the US dollar and trading in local currency. Again, how the Trump administration reacts to any such move and how India is impacted by it needs to be watched.

Another critical aspect that may have a direct impact on India is the US decision to withdraw from the Paris Climate Agreement, arguing that such agreements “do not reflect our country’s values or our contributions to the pursuit of economic and environmental objectives” and “unfairly burden the United States”. Trump has also lifted the ban on drilling for oil in the US and the restrictions on automobiles driven by fossil fuels, leading to global concerns. This will be an issue for India, which has actively advocated measures to cut down emissions.

Defence cooperation

Defence cooperation has emerged as a key instrument of India-US strategic partnership in recent years and has led to many big-ticket procurements from the US, including the Chinook helicopters, armed drones, M-777 artillery howitzers, etc. The US is currently pitching modern fighter aircraft to India. In the past, India has preferred the French Rafale and the Russian Sukhoi. Whether Trump will prevail over India to buy the F-35 series of fighter aircrafts or if India will be able to stick to its independent decision-making process, will be another issue on the cards.

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There is also India’s purchase of S-400 surface-to-air missile systems from Russia. So far, the US has exempted India from economic sanctions under the Countering America’s Adversaries Through Sanctions Act in this issue. Whether Trump will now use the threat of sanctions, especially in the context of the Russia-Ukraine war, is not clear.

The Modi visit is a definite signal of how important India is to the US, and it provides an opportunity to strengthen existing mechanisms and explore new areas of cooperation. It, however, comes with a word of caution, especially in the context of the issues discussed. Will India stand by and watch from the sidelines as the US navigates its global engagements, much of which is contrary to accepted global practice, or will India stand up to its principles and ideology and exercise its strategic autonomy, much like it did when the US tried to pressure India not to buy oil from Russia in 2022? It is a tough call for India, the contours of which may become more clear after Modi’s visit.

Col Rajeev Agarwal is a Foreign Policy Expert and a Senior Research Consultant at Chintan Research Foundation, New Delhi. He is a former Research Fellow at IDSA, Director in Military Intelligence and Director in the Ministry of External Affairs. His X Handle is @rajeev1421.