Former US President Donald Trump has announced that the United States and India are set to sign a long-awaited trade agreement, marking a potential breakthrough in negotiations that have stretched over several months. Speaking from South Korea, during the final leg of his Asia tour, Trump expressed optimism about strengthening economic ties with India and his “great respect and love” for Prime Minister Narendra Modi.
“If you look at India and Pakistan… I’m doing a trade deal with India and have great respect and love for Prime Minister Narendra Modi. We have a great relationship,” Trump said, hinting that the deal is nearing completion.
The statement signals progress toward resolving one of the key diplomatic and economic issues between the two countries. Talks had earlier stalled due to sharp disagreements over tariffs, oil imports from Russia, and market access for sensitive sectors such as agriculture and dairy.
Background of the Delayed Trade Deal
Negotiations between Washington and New Delhi have been ongoing since early 2024, with both sides attempting to balance domestic priorities and strategic interests. The proposed deal aims to enhance bilateral trade, which currently stands at over $190 billion annually, by addressing tariff barriers and improving access to each other’s markets.
Tensions arose when the United States imposed a 50 per cent “reciprocal” tariff on Indian goods, including an additional 25 per cent penalty for India’s continued imports of discounted Russian oil—a move that the US had strongly criticized following Russia’s invasion of Ukraine.
India, on the other hand, resisted American demands to open its dairy and agriculture markets, citing the sector’s sensitivity and its critical importance to millions of Indian farmers.
Recent Breakthrough
According to recent reports, both sides have made headway on two of the three major points of contention. The US has reportedly agreed to reduce tariffs to 16 per cent, while India has consented to scale back purchases of Russian oil to a limited quota. This development reportedly came after a phone conversation between Prime Minister Modi and Donald Trump, during which both leaders discussed the final contours of the agreement.
While neither government has officially confirmed the details of this potential trade-off, diplomatic sources suggest that the framework of the deal has been largely finalized. The formal signing is expected to take place in New Delhi or Washington in the coming months.
A Strategic Partnership
Analysts believe the deal could further cement the growing economic and geopolitical partnership between the two nations. The United States has been pushing to deepen ties with India as part of its broader Indo-Pacific strategy, positioning New Delhi as a counterbalance to China’s expanding influence in the region.
If finalized, the trade agreement could lead to greater cooperation in technology, energy, manufacturing, and defence sectors, potentially unlocking billions of dollars in investment opportunities.
Economists say the pact will also reassure markets about policy stability and signal renewed confidence in India-US relations after months of diplomatic strain.
What Lies Ahead
Though the broad contours of the deal appear settled, final discussions are still expected over intellectual property rights, data-sharing regulations, and export standards. Both sides are also working on mechanisms to prevent future tariff disputes and ensure smoother customs processes.
Trump’s comments in Seoul mark one of the clearest indications yet that Washington and New Delhi are ready to move beyond the trade deadlock. Once signed, the agreement would represent one of the most significant economic milestones in the recent history of India-US relations.