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www.newsindiatimes.com – that’s all you need to know Asia Policy Brief: Trump, Modi, And “Final Touches” On The U.S.-India Trade Deal Editorial note: Just a week after U.S. President Donald Trump and Indian Prime Minister Naren- dra Modi met on the sidelines of the G7 Summit in France, U.S. Trade Representative Jamieson Greer travelled to India to meet Piyush Goyal, India’s Minister of Commerce and Industry, as part of the push to finish negotiations on the U.S.-India trade deal. ASPI Delhi Senior Director Akshay Mathur explains where the U.S.-India relationship stands after the Trump-Modi bilat- eral, outcomes from Greer’s trip to India, and what lies ahead for the relationship. S TATE OF AFFAIRS: TRUMP AND MODI AT G7, GREER AND GOYAL IN NEW DELHI When President Trump was elected to a second term, there was hope in both New Delhi and Washington that the previous rapport built between President Trump and Prime Minister Modi would present the op- portunity to deepen strategic alignment between the two countries. Early signals seemed to suggest the bilateral relation- ship was on the right path: Trump invited Foreign Minister Jaishankar to his inaugu- ration and then Modi to theWhite House in February of 2025. But the early optimism was soon punctured by a series of disruptive tariffs against India: the 26% ‘Liberation Day’ tariffs in April 2025, sectoral tariffs on steel and aluminium in May, and an additional penalty for purchasing Russian oil in July. Rates reached as high as 50% before fall- ing to today’s 10% duty, which is expected to be replaced in late July with rates result- ing fromTrump administration’s Section 301 investigations into excess capacity and goods made with forced labor. Bilateral relations were further com- plicated byWashington’s warm engage- ment with Pakistan following the four-day India-Pakistan military conflict in May 2025. Then, just a week before Trump and Modi were set to meet on the sidelines of the recent G7 Summit, three Indian sailors were killed in the Gulf of Oman by a U.S. missile strike. Against this background, some expected a frosty encounter in France. Instead, Trump praised Modi ef- fusively, stating upfront that “he has been a friend for a long time now,” and adding that, when it came to trade negotiations, he’s “actually a killer.” Following the G7 bilateral, U.S. Trade Representative Jamieson Greer travelled to India to meet his counterpart, Piyush Goyal, in an effort to put a ‘final touch’ on the trade negotiations that started in February of 2025. However, contrary to expectations, Greer’s visit closed without a deal announced, though India’s readout assured that there has been “substantial progress” and that both sides have “confi- dence” in ongoing negotiations. WHY IT MATTERS: A DEEP ECONOMIC EM- BRACE, BUT NEGOTIATIONS HAVE BEEN TOUGH Though theWhite House levied sweep- ing tariffs on allies and competitors alike, Trump’s measures against India came as a surprise given the signal it sent about Washington’s apparent indifference to- ward India’s ambitions as a rising demo- cratic, manufacturing, and trading power in Asia. Certain sectors were spared, including pharmaceuticals, electronics, and services exports that underpin the U.S. economy, but the high tariffs rattled what had grown over recent years into a deepening economic embrace. The U.S. is India’s largest trading partner in goods ($132 billion), the only country in the top five trading partners with whom India has a surplus in goods. It is the primary destination for Indian exports (20% of total exports), the third largest investor in Indian capital markets (over 40% of total assets held by foreigners), and the largest source of remittances (over 25% share of the total). The economic relationship likewise benefits the U.S.: Top U.S. goods exports in FY2026 include energy products crude oil, natural gas, coal, airplanes and digital circuits. Equally importantly, U.S.-based companies in India hold nearly $250 bil- lion of assets and generate over $10 billion in profits annually. Recently, Indian in- dustry leaders committed $20.5 billion in investments spanning pharmaceuticals, advanced manufacturing, energy infra- structure, and emerging technologies. There is also growing bilateral coopera- tion in securing supply chains of critical minerals, semiconductor fabrication, advanced AI systems and deployment infrastructure — in February 2026, India joined Pax Silica and, three months later, the U.S. and India announced a bilateral critical minerals agreement. A new trade agreement could bolster these trends and deepen an already substantial economic relationship. In February 2026, after a year of talks, the U.S. and the Indian government reached a framework for an interim trade agreement that involved an immediate reduction of the tariffs to 18%. The move was a reprieve and reassurance that both governments were committed to arriving at a deal, indicating that an understanding had been reached on specific industrial, food, agriculture, energy, aviation, auto and technology products. After the U.S. Supreme Court ruled against Trump’s Liberation Day tariffs (imposed under International Emergency Economic Pow- ers Act), the tariff on India was further reduced to a flat rate of 10% (using the authority under Section 122 of the Trade Act). Agriculture has been one of the sticking points in negotiations, as India—where nearly half the population depends on farming—has defended its agricultural market, particularly from government- subsidised or genetically modified, foreign crops. Modi would like to negotiate a balanced and fair agreement that defends the Indian market from U.S. agricultural imports like corn and soybeans. Establish- ing new rules of origin, removing barriers to digital trade and addressing non-tariff barriers in licensing and standards, have also been high on the agenda. President Trump’s quip during the G7 bilateral that Prime Minister Modi is a “tough negotiator” may have been a genuine indicator of India’s hard position on topics like agriculture. Prime Minister Modi’s mission of diversifying exports by fast-tracking FTAs with other countries may have also given his team further le- verage in negotiations with the U.S. While trade with the U.S. floundered, since 2025, India has concluded negotiations with the UK, EFTA, Oman, New Zealand and the European Union and launched fresh negotiations with GCC, Israel, EAEU, Chile and Canada. At the G7 bilateral, prompted by reporters, President Trump reiterated that India has a “great friend in theWhite House.” Mirroring this positivity, India’s readout confirmed that both leaders noted with “particular satisfaction the significant progress made in negotia- tions towards an interim bilateral trade agreement.” Still, as Greer and Goyal met in New Delhi this week, Goyal presum- ably sought assurances that the interim agreement reached will not be upended later by findings from the ongoing Section 301 investigations initiated by the U.S. or outstanding Section 232 investigations. Ultimately, India wants a final tariff rate that enables it to outcompete manufac- turing rivals in Asia like Vietnam, which secured a tariff rate of 20% in its own deal with the US. Speculation about a possible an- nouncement of the interim trade deal by the end of Greer’s visit to India was fueled by remarks yesterday from a senior U.S. official that a deal was “very, very close”. Still, as of writing, no deal has been announced. While we wait on the U.S.’ readout from the meeting, India’s indicat- ed that “pathways to conclude an interim agreement” were on the table. In a video posted by the U.S. Embassy, Greer stated that there are exciting opportunities for the U.S. and India to collaborate on AI and that the bilateral relationship is “only going to a higher and higher level with every passing week.” The possibility of a formal announcement in the coming days remains, especially if the deal is waiting for a review by both leaders who would like to retain the privilege of declaring the interim deal. WHAT TO WATCH • Section 301 Investigations: USTR has proposed an additional 12.5% tariff duty on India following its Section 301 investigation into enforcement of forced labor rules (which involved 54 other countries). A separate Section 301 probe into industrial excess ca- pacity — covering 21 broad manufac- turing sectors, including automobiles, chemicals, electronics, energy goods, solar modules, and steel —may also have implications for India when findings are announced (alongside 15 By Akshay Mathur, Senior Director, Asia Society Policy Institute, Delhi PHOTO: REUTERS/EVELYN HOCKSTEIN US - India: Special Report News India Times (June 27, 2026 - July 3, 2026) July 3, 2026 5 U.S. President Donald Trump attends a bilateral meeting with Indian Prime Minister Narendra Modi during the G7 Summit in Evian-les-Bains, France, June 17, 2026. - Continued On Page 6