Modi’s Trade Strategy Seeks To Appease Trump, Avoid Conflict

India-West News Desk

WASHINGTON, DC – India is swiftly making concessions to the United States as Prime Minister Narendra Modi’s government seeks to avoid a trade war under President Donald Trump’s second term, Bloomberg reported.

In a series of rapid moves, New Delhi has taken steps to align with Trump’s agenda, including a major overhaul of its tariff regime announced on February 1. The revisions included broad cuts on import duties for products ranging from textiles to motorcycles, marking India’s first such restructuring.

Additionally, Bloomberg noted that India has agreed to accept thousands of unlawful migrants from the U.S. and maintain the dollar as its primary trading currency.

Unlike the more resistant stance Modi took during Trump’s first term—when tensions over trade led Washington to revoke India’s trading privileges—the current approach signals a shift toward conciliation.

Indian officials told Bloomberg that they see more benefit in maintaining cooperative ties with Trump, particularly as other global economies scramble to adapt to his protectionist policies. South Korea has proposed increasing its imports of U.S. food and energy, while Japan is working to secure stable energy supplies from Washington. Australia, too, is moving quickly to avoid potential tariffs on its aluminum and copper exports.

India faces significant risks in any trade conflict with the U.S., given its $78.1 billion trade deficit—driven largely by energy imports—partially offset by a $35.3 billion surplus with Washington, Bloomberg reported.

The U.S. has also grown closer to India in defense, technology, and nuclear cooperation, while American firms like Apple Inc. and Micron Technology Inc. have expanded their presence in the country. However, tensions remain. Trump has repeatedly criticized India’s high trade barriers and warned of imposing reciprocal tariffs.

Additionally, India’s continued import of Russian crude oil, despite U.S. sanctions, remains a contentious issue.

Another point of friction arose last year when the U.S. indicted an Indian government official over an alleged plot to assassinate an American citizen. While India has recommended legal action against an individual it believes was involved, the case has added strain to the relationship.

“Trump’s trajectory is if you agree to him once, you can’t be sure that it’s done forever, because he will come back asking for a higher price,” an Indian analyst told Bloomberg. The challenge for Modi, analysts suggest, will be navigating Trump’s evolving demands while safeguarding India’s economic and strategic interests.