Amidst strained relations over tariffs and energy purchases, US President Donald Trump has shifted his tone, announcing that the United States and India are continuing trade negotiations and that he intends to speak with Prime Minister Narendra Modi soon. This development signals a potential thaw in relations between the two countries.

In a recent social media post, Trump stated that he was pleased to announce ongoing negotiations with India to address trade barriers. He also mentioned looking forward to speaking with his "very good friend," Prime Minister Modi, in the coming weeks. Trump expressed optimism about reaching a successful conclusion for both nations.

This announcement marks a change from Trump's recent criticisms of US-India ties. He had previously stated that America had "lost" India and Russia to China. His administration had also increased rhetoric against New Delhi. Recently, the US imposed a 50% import duty on Indian goods entering American markets. This measure has impacted exports from labor-intensive sectors like textiles, leather, and footwear. India has called these measures unfair and defended its market-driven energy procurement.

Despite these tensions, both leaders have described the bilateral relationship as special and have committed to continued engagement. A high-level conversation is anticipated in the coming weeks to advance the trade talks.

Nirmala Sitharaman, India's Finance Minister, has affirmed that diplomatic teams are actively engaging with the U.S.. She emphasized India's commitment to keeping all doors open for trade negotiations.

Trade relations between the U.S. and India have been strained due to high tariffs. The U.S. is India's largest trading partner, with a total of $191 billion in bilateral trade in goods and services. The U.S. is also the third-largest investor in India, with $76.26 billion in FDI between April 2000 and June 2025, accounting for 10% of total FDI received by India.

Earlier in the year, Prime Minister Modi visited Washington, D.C., where he met with President Trump. The meeting resulted in several announcements related to trade, defense, energy, technology, and global security. Both countries announced "Mission 500," which aims to more than double bilateral trade to $500 billion by 2030. To achieve this, they pledged to enhance trade by increasing U.S. exports of industrial goods to India and Indian exports of labor-intensive manufactured products to the United States.

On the defense front, plans were announced to sign a new 10-year "Framework for the U.S.-India Major Defense Partnership in the 21st Century". The U.S. is set to expand defense sales to India, with New Delhi planning to purchase Javelin missiles, Stryker vehicles, and additional P-8I aircraft. The U.S. is also paving the way to provide India with F-35 stealth fighters. Furthermore, the Autonomous Systems Industry Alliance, a new initiative, aims to boost the co-development and co-production of maritime drones and counter-drone systems.

Looking ahead, with President Trump expected to visit India for the Quad summit later this year, both countries have agreed to activate new initiatives under the Quad. They also intend to convene partners from the India-Middle East-Europe Corridor and the I2U2 Group to announce new initiatives.

Despite the recent tensions, the upcoming talks between President Trump and Prime Minister Modi signal a renewed effort to address trade imbalances and strengthen the economic partnership between the two nations.