Modi’s visit to the United States has instilled optimism in the industry in the face of tariff threats

Indian Prime Minister, Narendra Modi, is anticipated to propose tariff cuts and increased energy and defense imports during a meeting with U.S. President Donald Trump during his two-day visit to the United States, which commences on Wednesday.

Modi is eager to prevent a potential trade conflict and strengthen trade relations in response to Trump’s promise of reciprocal tariffs on numerous countries, which includes a 25% tariff on all steel and aluminum imports.

Key topics that are anticipated to be addressed during the bilateral meeting include this list:

ENERGY IMPORTS

India intends to propose an increase in the import of energy products from the United States, which is estimated to be over $11 billion in the first eleven months of 2024, in order to address trade imbalances.

India, the fourth largest importer of liquefied natural gas (LNG) in the world, may encourage its oil companies to acquire additional U.S. LNG in response to the Trump administration’s decision to eliminate export permit restrictions for new projects.

Chairman Sandeep Gupta of state-owned GAIL India Ltd (GAIL.NS) has stated that the company is either seeking to acquire a stake in a U.S. LNG facility or to secure long-term supply agreements.

IMPORTS FOR DEFENSE

During Modi’s visit, it is probable that India will negotiate the purchase and co-production of combat vehicles and finalize a contract for a fighter aircraft engine.

There have been protracted negotiations between the United States and India regarding the co-production of General Dynamics’ (GD.N) Stryker combat vehicles. See the new tab.

In the upcoming weeks, officials from Hindustan Aeronautics Ltd (HAL) (HIAE.NS), a state-owned company in India, are scheduled to meet with officials from the United States and General Electric’s (GE.N) aerospace unit in order to finalize the agreement.

ILLEGAL IMMIGRATION

The U.S. administration’s deportation of illegal Indian immigrants and India’s apprehensions regarding their treatment are anticipated to be the subject of discussion between the two nations.

The industry is addressing the misuse of H-1B visas while seeking an increase in legal migration to meet the United States’ professional shortage, according to Mukesh Agi, president of the US-India Strategic Partnership Forum (USISPF).

LEVEL PLAYING FIELD AND MARKET ACCESS

The issue of “market access and a level-playing field” for U.S. businesses is likely to be raised by U.S. officials and industry representatives, who will reference the increased import tariffs on specific commodities.

Elon Musk is anticipated to convene with Modi to deliberate on the expediting of the allocation of satellite spectrum for his Starlink project and the introduction of Tesla’s vehicles to India.

INDIAN COMPANIES’ INVESTMENTS

India is expected to suggest that the United States facilitate investments by Indian companies, emphasizing their billion-dollar investments in the steel, garment, and contact manufacturing sectors.

FORTIFYING STRATEGIC ALLIES

Modi’s visit is anticipated to strengthen strategic and economic relations between India and the United States, according to Indian officials and industry groups.

In response to the growing threats from China, New Delhi is endeavoring to attract additional investments from U.S. companies in the insurance sector and manufacturing and services.