'We will have a good deal': Trump hints at progress in India-US trade talks

US President Donald Trump has said he is optimistic about reaching a favourable trade agreement with India, praising Prime Minister Narendra Modi as a “fantastic leader” and a close personal friend. Speaking to reporters on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland, Trump responded to a question from a Moneycontrol journalist about stalled India-US trade talks. He said he holds Modi in high regard and expressed confidence that the two countries would eventually strike a positive deal.

The remarks come nearly five months after the United States imposed steep tariffs of up to 50% on certain Indian exports. Trump had earlier described half of the tariff hike as a “penalty” linked to India’s continued purchase of Russian oil. Since then, uncertainty has surrounded the future of a trade agreement. Negotiations between Indian and American officials began even before the tariffs were implemented, with formal discussions launched in March-April 2025 after talks were approved in February. However, mixed signals from the Trump administration have added to the confusion.

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US Commerce Secretary Howard Lutnick recently claimed that a potential deal collapsed because Prime Minister Modi did not personally reach out to Trump. Another senior aide suggested that Trump had approved a proposal that could raise tariffs on Indian goods to as high as 500%, sparking concerns over the direction of bilateral relations. India swiftly dismissed Lutnick’s remarks, calling them inaccurate. Optimism returned after newly appointed US Ambassador to India, Sergio Gor, stated that Washington views New Delhi as a key strategic partner and confirmed that trade negotiations are still ongoing.

Earlier this month, Trump also hinted that tariffs on India could be increased further. Speaking to the media aboard Air Force One, he described Modi as “a good guy” and suggested India was trying to address US concerns. “India wanted to keep me satisfied. Modi understood I wasn’t happy, and that mattered. We can raise tariffs very fast if needed,” Trump said. Meanwhile, Trump used his address at the 56th Annual World Economic Forum Summit to highlight what he called a dramatic economic resurgence in the United States. He claimed that America’s strong performance is driving global economic momentum.

Calling the US the world’s primary economic engine, Trump said that after one year back in office, the country has seen rapid growth, rising incomes, falling inflation, increased investment, and improved border security, describing it as one of the fastest economic turnarounds in US history.