As PM Modi-Trump shake hands in France, much riding on India-US relations

New Delhi, June 17 (IANS) The bear hugs may have been reportedly missing, but there was seen the extended hand to support the other person step on to a platform for the official photoshoot.

Prime Minister Narendra Modi and United States President Donald Trump’s meeting at the G7 Summit in France came after 16 months of strained ties.

The period was marked by tariffs, immigration disputes, and the deaths of three Indian sailors in recent US military strikes.

Both nations are now trying to stabilise relations while finalising an interim trade agreement that could reshape economic cooperation.

The countries are on the verge of inking an agreement that will reshape tariffs and market access, even as diplomatic tensions over Russia, Pakistan, and sanctions did complicate ties.

At the same time, energy security has emerged as a stabilising pillar, with both nations deepening cooperation in hydrocarbons and clean energy to reach a $500 billion trade target by 2030.

Recently, the US-India Business Council (USIBC), in collaboration with Grant Thornton Bharat, released a report titled “Strengthening the India-US Energy Partnership: Unlocking Hydrocarbon Opportunities through Investment and Collaboration”.

It identified hydrocarbons as a key driver of the shared ambition to expand bilateral trade to $500 billion by 2030 and highlighted how the India-US energy relationship is evolving from a traditional buyer-seller model into a strategic partnership spanning trade, investment, technology, infrastructure and energy security across the hydrocarbon value chain.

The two nations are also working on clean energy collaboration.

Under the Strategic Clean Energy Partnership (SCEP), New Delhi and Washington are working on hydrogen, energy storage, renewables, and sustainable aviation fuels.

Indian Railways’s goal of becoming Net Zero Carbon Emitter by 2030 is also supported by US cooperation.

US Trade Representative Jamieson Greer and India’s Commerce Minister Piyush Goyal are expected to finalise the interim deal later this month, with reports of only “one per cent of sticking points” left unresolved.

Prime Minister Modi and President Trump last met in February 2025 and the gap, filled with some friction, makes the recent meeting crucial.

The deaths of three Indian sailors in US strikes near Oman have heightened tensions, forcing Prime Minister Modi to raise the issue directly with President Trump.

Meanwhile, New Delhi seeks clarity on tariffs and progress on an interim trade agreement, while Washington wants expanded market access.

Since 2018, US tariffs on Indian steel, aluminium, and later broader goods disrupted trade.

And in 2025, Washington imposed punitive reciprocal tariffs of up to 50 per cent linked to India’s Russian oil purchases.

Further, the US tightening H-1B visas disproportionately affected Indian professionals, straining goodwill.

Elsewhere, as per the Interim Trade Agreement of February, India agreed to reduce tariffs on US industrial and agricultural goods, especially sorghum, soybean oil, wine.

In turn, Washington set reciprocal tariffs at 18 per cent on Indian textiles, leather, chemicals, and machinery, with plans to remove tariffs on pharmaceuticals, gems, and aircraft parts once the deal is finalised.

Also, high-level negotiations are on for a Bilateral Trade Agreement with talks for a comprehensive pact covering supply chains, ICT goods, and medical devices.

Despite certain crises, both governments emphasise the strategic importance of the partnership, especially in Indo-Pacific security, energy cooperation, and technology.

There were testing times when in 2025, Washington imposed 25–50 per cent tariffs on Indian goods, citing India’s Russian oil imports and also a fear of BRICS members allegedly working on de-dollarisation.

In February, the US Supreme Court intervened, and Trump’s 50 per cent reciprocal tariff regime was struck down, replaced by a uniform 10 per cent on all countries until July 24, 2026.

This narrowed India’s advantage over competitors like Pakistan and Sri Lanka, forcing renegotiation.

Additionally, the Pakistan factor resurfaced with Trump’s outreach at its Army Chief Asim Munir, sometimes over Prime Minister Shehbaz Sharif.

Meanwhile, Prime Minister Modi’s visit to Moscow in 2024, coinciding with a NATO summit, reportedly did not go well with Washington.

However, the relationship seems to be shifting toward strategic integration, including investment, technology, infrastructure, and supply chain resilience, which the meeting in France may help.

The meeting sets the tone for India and the US to overcome recent crises and finalise a trade framework that strengthens bilateral economic and strategic partnership.

–IANS

jb/khz