Prime Minister Narendra Modi and US President Donald Trump recently engaged in a phone conversation primarily focused on trade, marking a significant moment as both countries aim to revive and strengthen their economic ties. This exchange comes amid ongoing negotiations that could lead to a major trade deal, potentially reducing the high tariffs the US currently imposes on Indian exports. While the final contours of the agreement are still being shaped, the call has renewed optimism for a breakthrough that could benefit both nations' traders and consumers.

Modi expressed gratitude to Trump for the warm Diwali greetings during the call, emphasizing the shared democratic values and mutual commitment to combating terrorism. Trump described the India-US relationship as “great,” hinting at “some great deals” in the pipeline, particularly on trade issues. However, certain complications still linger, notably around India’s oil imports from Russia. Trump reiterated that Modi assured him India would limit its purchases of Russian crude oil, a sensitive point given the geopolitical pressures involved and the US tariffs imposed to discourage such imports.

The timing of this conversation is notable as it precedes the ASEAN Summit scheduled in Kuala Lumpur later this month, an event where a face-to-face meeting between Modi and Trump had been anticipated. However, Modi has decided to attend the summit virtually, citing Deepavali celebrations in India, which means a physical meeting with Trump at the event is unlikely. This decision has sparked discussions about the current state of India-US ties and trade negotiations, especially since the US tariffs on Indian goods have reached unprecedented levels over recent months.

The prospective trade deal aims to bring down tariffs from the current steep 50% on many Indian goods, including those targeted due to India’s Russian oil imports, to around 15%. Such a reduction would be a significant boost to Indian exporters and help open up the US market more extensively. For the US, greater access to India’s growing consumer market presents an opportunity to expand its economic influence in one of the world’s fastest-growing economies.

While Modi’s virtual participation at ASEAN somewhat dims the chances of an immediate face-to-face dialogue at the summit, the phone call sets a positive tone for ongoing discussions. It reflects the shared recognition in both New Delhi and Washington of the strategic importance of improving bilateral trade, even as complex geopolitical factors and tariff disputes present challenges. Experts expect that any formal deal announcement might come after detailed negotiations post-ASEAN summit.