Digital Team
India–US trade talks took centre stage at the World Economic Forum in Davos after US President Donald Trump signalled progress towards a potential deal and praised Prime Minister Narendra Modi as a trusted friend.
US President Donald Trump on Thursday indicated fresh momentum in India–US trade talks, saying Washington and New Delhi are headed towards “a good deal.” Speaking on the sidelines of the World Economic Forum in Davos, Trump praised Prime Minister Narendra Modi as a “wonderful man” and a “friend,” signalling a notable shift in tone amid ongoing negotiations over tariffs, market access and global supply chains.
India–US Trade Talks Gain Momentum at Davos
Addressing business leaders and policymakers at Davos, Trump said the United States is optimistic about finalising a trade agreement with India. “We’re going to have a good deal,” he said, underscoring what officials describe as renewed engagement between the two strategic partners.
The comments come at a time when India and the US are reassessing trade priorities against a backdrop of geopolitical churn, slowing global growth and persistent supply-chain disruptions. For New Delhi, the emphasis remains on safeguarding domestic interests while expanding access to global markets.
Trump Praises Narendra Modi, Signals Strategic Reset
Trump’s public praise for Prime Minister Modi — whom he described as a leader he “respects deeply” — marks a departure from earlier rhetoric that focused on tariffs and trade imbalances. Officials familiar with the talks say the language reflects a broader strategic reset, recognising India’s growing economic and geopolitical weight.
India, now among the world’s fastest-growing major economies, is viewed by Washington as a reliable long-term partner amid strained US–China ties and uncertainty in Europe. Analysts note that the US is keen to deepen trade with India to diversify supply chains and reduce overdependence on a single market.
Why India Matters to the US Economy
India’s appeal to global investors and governments lies in three fundamentals: scale, stability and growth potential. With a large consumer base, rising purchasing power and democratic institutions, India is increasingly central to global trade strategies.
Officials point out that India has maintained a firm negotiating position on sensitive sectors such as agriculture, fisheries and manufacturing. New Delhi has consistently indicated that while it is open to trade liberalisation, core domestic interests will not be compromised.
Tariffs, Trade Barriers and the Road Ahead
At the heart of the India–US trade talks are tariffs and non-tariff barriers. While earlier discussions stalled over sharp differences, recent signals suggest a willingness on both sides to narrow gaps.
Trade experts say any final agreement is likely to involve calibrated tariff reductions rather than sweeping concessions. “India is negotiating from a position of strength,” a senior official said, adding that incremental progress is more realistic than a sudden breakthrough.
Europe Factor: India Expands Trade Footprint
Trump’s remarks at Davos also come as India accelerates trade engagement with Europe. New Delhi has advanced negotiations on free trade agreements with multiple partners, reinforcing its strategy of diversified economic diplomacy.
The European Union’s growing engagement with India has added competitive pressure on Washington, analysts say, making it harder for the US to remain on the sidelines of one of the world’s most dynamic markets.
Geopolitics at Davos: Beyond Trade
While trade dominated Trump’s India-related comments, his Davos speech also touched on global flashpoints including Gaza and Greenland. However, India remained conspicuously absent from geopolitical criticism, a contrast noted by diplomats tracking Washington’s evolving priorities.
New Delhi has so far maintained strategic autonomy on global conflicts, focusing instead on economic diplomacy and regional stability — an approach that has drawn quiet approval from several major powers.
What Modi Diplomacy Signals
Observers describe the current phase of talks as a test of “quiet diplomacy.” India has avoided public posturing, preferring sustained engagement through official channels. This approach, analysts argue, has helped New Delhi preserve leverage while keeping negotiations alive.
Trump’s positive remarks are seen less as a concession and more as an acknowledgment that India is no longer a partner that can be pressured into unfavourable terms.
India–US Trade Talks Enter a decisive Phase
The India–US trade talks are yet to conclude, but Trump’s Davos comments suggest a softening of stance in Washington. For India, the focus remains on protecting national interests while expanding global economic partnerships. As negotiations continue, the message from New Delhi is clear: engagement without compromise, and partnership without pressure.
FAQs
Q1: What did Donald Trump say about India–US trade talks at Davos?
A: Trump said the US and India are heading towards “a good deal” and praised Prime Minister Modi’s leadership.
Q2: Are India–US trade talks finalised?
A: No. Talks are ongoing, with differences remaining on tariffs and market access.
Q3: Why is India important for US trade strategy?
A: India offers a large, stable market and an alternative supply chain amid global uncertainties.
Q4: Has India agreed to lower tariffs?
A: India has signalled openness to calibrated reductions but insists on protecting core sectors.
Q5: How does Europe factor into India’s trade diplomacy?
A: India is expanding trade ties with European partners, increasing its global negotiating leverage.
References:
🔗 Times of India – Trump on India–US trade talks
https://timesofindia.indiatimes.com/business/india-business/we-are-going-to-have-a-good-deal-donald-trump-shares-update-on-india-us-trade-talks-praises-pm-modi/articleshow/127014321.cms
🔗 Hindustan Times – Trump calls PM Modi ‘fantastic leader’
https://www.hindustantimes.com/india-news/we-are-going-to-have-a-good-deal-trump-calls-pm-modi-fantastic-leader-at-davos-says-good-deal-on-cards-for-india-us-101769012649839.html
🔗 Reuters – India, U.S. engage on trade issues
https://www.reuters.com/world/india/india-us-discuss-trade-issues-january-13-new-envoy-says-2026-01-12/
🔗 Reuters – India–EU trade pact context amid talks
https://www.reuters.com/world/india/trade-deal-with-eu-close-says-india-trade-secretary-2026-01-15/
🔗 Reuters – Market reaction after Trump softened stance on tariffs
https://www.reuters.com/world/india/indian-shares-seen-higher-trump-eases-greenland-stance-drops-eu-tariff-threat-2026-01-22/
🔗 Times of India – India sees US trade optimism as ‘encouraging’
https://timesofindia.indiatimes.com/business/india-business/indiaus-trade-talks-vaishnaw-welcomes-donald-trumps-optimism-says-india-deeply-engaged-globally/articleshow/127172191.cms
🔗 News On AIR – Trump praises PM Modi and expresses confidence in a trade deal
https://www.newsonair.gov.in/us-president-trump-praises-pm-modi-in-davos-expresses-confidence-in-good-deal-for-us-india-trade/
