U.S. Visit of Modi Stirs Controversy: Little Substance Acknowledged
The US and India are gearing up for a significant shift in their relationship, as Prime Minister Narendra Modi met with President Donald Trump in Washington on February 13, 2025. This meeting, held at the Blair House opposite the White House, was adorned with the Indian national tricolor.
The US-India summit comes amidst a tumultuous period in global trade, with President Trump enacting tariff measures that have affected countries worldwide. The countries under the brunt of these tariffs include Mexico and Canada, who were hit with 25% import tariffs from February 1, 2025, and all countries worldwide, who faced a general 10% reciprocal tariff from April 5, 2025. China, in particular, has been subjected to tariffs raised up to 125%, with certain imports from countries with large trade deficits suspended for most, except China. Exceptions to these tariffs include Canada and Mexico under USMCA and specific sensitive goods.
The US has also asked for increased imports of oil and natural gas, a move that could potentially reduce the trade imbalance. However, this approach depends on a new "drill, baby, drill" approach, which could lead to a global production glut and lower the price of oil. On the other hand, the import of larger volumes of liquified natural gas can be constrained by its high cost versus cheaper, albeit carbon-intensive, coal.
In a bid to strengthen economic ties, the US has proposed joint development, production, and transfer in artificial intelligence, low-cost LLMs, high-capacity chips, and green biotechnology. Commercial cooperation in small modular reactors is also proposed for India's unmet demand for clean energy.
The US Foreign Corrupt Practices Act of 1977 is currently under review, a fact that may potentially affect business practices in foreign markets. This review could signal a new direction in US policy, aiming not to overload economic regulations with onerous responsibilities beyond those necessary to protect US interests.
The meeting between Modi and Trump was not without its challenges. The summit was awkwardly timed and had more misses than hits, possibly due to impossibly high expectations based on their friendship. Tulsi Gabbard, the first Hindu US Director of National Intelligence, and Elon Musk were present at the initial meetings.
The US-India relationship is not without its complexities, as evidenced by the proposed extradition of Tahawwur Rana, an alleged perpetrator of the 2008 Mumbai terrorist attack. This move could potentially ease Indian ire at procedural delays, but the possibility of a quid pro quo remains unclear.
Several US Congressmen have written to the attorney-general against "questionable decisions" by the justice department, including entertaining a case against the Adani Group. These concerns highlight the delicate balance between business and politics in the US-India relationship.
As the world watches, the US and India are poised to navigate a new era in global trade and cooperation. The future holds promises of joint ventures in technology and clean energy, but also challenges in the form of trade tensions and political complexities. Business and feelings rarely go happily together, and anything else is exceptional and best left to good fortune and common sense.
