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Relations between the United States and India may be entering a new phase of cooperation, as President Donald Trump and Prime Minister Narendra Modi expressed optimism this week about resolving trade disputes that have strained ties between the two democracies.

A Relationship Marked by Tensions and Tariffs

Over the past year, U.S.-India relations have experienced dramatic swings. In August, the U.S. slapped an additional 25% tariff on Indian imports, raising total duties on certain goods to nearly 50%—among the highest imposed on any major trading partner. Washington argued the move was in response to New Delhi’s growing purchases of discounted Russian oil, which U.S. officials say undermine efforts to pressure Moscow over its war in Ukraine.

This decision sparked sharp reactions in India. At the same time, Modi’s participation in the Shanghai Cooperation Organization (SCO) summit alongside Russian President Vladimir Putin and Chinese President Xi Jinping added further strain. Trump openly criticized the imbalance in trade, calling the relationship a “totally one-sided disaster” and lamenting that India had not reduced tariffs sooner.

Signs of Reconciliation

Despite these tensions, Trump’s latest remarks on Truth Social struck a notably softer tone. He wrote that negotiations are ongoing and expressed confidence that “there is no difficulty in coming to a successful conclusion for both of our Great Countries.” Modi echoed this sentiment, describing the U.S.-India partnership as holding “limitless potential” and hinting at further conversations with Washington in the coming weeks.

The exchange comes at a delicate moment. Reports surfaced that Trump has urged the European Union to impose 100% tariffs on both India and China in retaliation for their continued purchases of Russian oil. Such a move, if carried out, would dramatically escalate trade disputes and risk pulling India deeper into the geopolitical crossfire between Washington, Brussels, and Moscow.

Russian Oil and Energy Security

India’s dependence on Russian crude remains a central sticking point. Since the start of the Ukraine conflict, India has increased its imports of Russian oil significantly, with some reports suggesting Russian crude now accounts for over 35% of India’s total imports—up from less than 2% before 2022. Indian officials have repeatedly defended this policy, arguing that securing affordable energy is essential for the country’s 1.4 billion citizens and fast-growing economy.

Modi has described the partnership with Russia as “special and privileged,” reinforcing New Delhi’s unwillingness to bow to Western pressure. Analysts say this energy stance is unlikely to change, as India aims to balance geopolitical relationships while ensuring domestic energy stability.

Agricultural and Market Barriers

Beyond oil, the U.S.-India trade talks continue to be hampered by disagreements over market access. Washington has long pushed New Delhi to open its agricultural and dairy sectors, which would allow U.S. farmers to tap into one of the world’s largest consumer markets. However, India has resisted, citing concerns that millions of small farmers could be devastated by foreign competition.

“Given India’s geopolitical heft and sizable economy, New Delhi believes that it can maintain this tough negotiating position,” observed Chietigj Bajpaee, senior research fellow at Chatham House.

Looking Ahead

Despite the disputes, both leaders appear motivated to reset the tone of discussions. Trump’s comment from the Oval Office earlier this month—where he reassured reporters that “there is nothing to worry” about the U.S.-India relationship—underscored Washington’s recognition of India’s strategic importance.

For Modi, closer ties with Washington provide opportunities for investment, technology cooperation, and stronger global influence. For Trump, securing a favorable deal with India could help counterbalance China’s growing dominance in Asia while also reinforcing his “America First” trade agenda.

As negotiations continue, the outcome will depend on how both nations navigate sensitive issues such as tariffs, oil imports, and agricultural access. While no breakthrough has been announced yet, the renewed rhetoric of optimism suggests both sides see the costs of prolonged conflict outweighing the benefits of confrontation.