Personal rapport despite tariffs – DW – 02/14/2025

Indian Prime Minister Narendra Modi and US President Donald Trump see themselves in each other. They both rode populist waves to stardom and thrive on the energy of big crowds, and both have been able to use their relationship with the other to bolster their standing at home.

Observers view their mutual understanding as the bedrock of their friendship despite their meeting taking place following Trump’s sweeping trade tariffs.

In the joint press conference in Washington on Thursday evening, the bonhomie between Trump and Modi appeared undiminished.

“There is still the personal chemistry between the two leaders, in spite of a lot of talk about how this will proceed, aid Anit Mukherjee, a senior fellow at the Observer Research Foundation, a nonprofit focused on policy issues in the US and India. “I think at a personal level, there was good rapport to be seen.”

But personal rapport aside, America First cannot mean India First and vice-versa.

Modi catches Trump in a tariff mood

Hours before Modi met with Trump at the White House, the US president signed an executive order on reciprocal tariffs, seeking to match existing duties on US exports in other countries with equivalent tariffs on products coming into the US.

A fact sheet released by the White House mentioned India in particular.

“The U.S. average applied Most Favored Nation (MFN) tariff on agricultural goods is 5%. But India’s average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while we only charge a 2.4% tariff on Indian motorcycles,” the fact sheet reads.

There was no mention that India already slashed its import tariff on heavy-weight motorbikes from 50% to 30% last week.

The announcement of reciprocal tariffs coinciding with Modi’s visit means India will have to pull off a balancing act between protecting businesses at home, while maintaining valuable market access to the US. This balancing act could potentially have a political costs for Modi amid a slowing Indian economy.

Modi’s difficult balancing act

“India could try and lower tariffs, but that’s difficult domestically,” said Irfan Nooruddin, a professor in Indian Politics at Georgetown University in Washington, D.C.

“The goods that the United States wants to sell in India are consumer goods. That displaces a great number of Indian small and medium enterprises that are very used to those protections and a large part of Mr. Modi’s voting bloc,” he said. 

India is betting that agreeing to buy more American oil and gas, as well as defense products like F-35 stealth jets, could help stave off the worst effects of Trump’s irritation over the trading relationship.

“I think the way that the Indian administration has chosen to deal with Trump is to focus less on the tariffs and more on Trump’s obsession with the trade surplus and deficit issue,” said Nooruddin.

“It doesn’t really speak to the tariffs issue, but it does begin to show that India is willing to spend a lot of money buying American goods in a way that allows Mr. Trump to say, ‘hey, I helped reduce the trade deficit with India, and I’m selling American goods to India’.”

The trade deficit between India and the US stands at $45.6 billion (€43.59 billion).

Indians hit by Trump’s migration crackdown

But as far as issues go, it wasn’t just what the two leaders had to say on trade that was much anticipated. Trump’s crackdown on irregular migration is also hitting Indians.

Some 725,000 undocumented Indian immigrants live in the US, according to Pew Research, a Washington-based think tank. That makes Indians the third largest group of unauthorized migrants in the country, after Mexicans and El Salvadorians.

As part of a crackdown on migrants by the Trump administration, the US deported 104 Indians on a military plan earlier this week. 

Modi’s visit came after footage circulated from the US deportation flight showing Indian deportees shackled and handcuffed. This caused widespread outrage in India, with many calling for Modi to stand up to Trump. Later analysis by DW, showed that some shared images about the furore actually depicted people waiting to be deported to Guatemala.

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