Not a word, no Nobel support: How PM Modi got Trump to cut tariffs and trade deal
India Today
PM Modi, without any confrontation or provocation, let patience do the heavy lifting. Eventually, the US's loudest dealmaker blinked, without PM Modi having to say a word or resorting to massaging Trump's ego.
At last, both the tone and tariffs against India have been brought down by Trump. And Prime Minister Narendra Modi, like a true Gujarati with a strong understanding of business, managed to do it by maintaining a strategic silence and through tactical diplomacy -- which spoke the loudest. And to top it all, without any flattery or Nobel Peace Prize endorsement. India walked away with not only one of the lowest tariff rates at 18%, lower than those of China and Pakistan, but also had the additional 25% levy on Russian oil purchases dropped.
The whole saga, which saw India-US ties reach their lowest ebb, underscored how PM Modi, without any confrontation or provocation, let patience do the heavy lifting. Eventually, the US's loudest dealmaker blinked -- without PM Modi having to say a word or resorting to massaging Trump's ego. Crucially, PM Modi chose not to play on Trump's terms. Ask US Commerce Secretary Howard Lutnick, and he would tell you how India "missed" a trade deal window just because PM Modi did not personally call Trump last year.
However, the details of the deal remain unclear, with differing narratives emerging from Trump and Modi. There was no mention by PM Modi of a trade deal being reached, or claims about stopping Russian oil purchases or the $500 billion commitment to buy American products that Trump tom-tomed in his post. In perspective, US goods exports to India in 2024 were just $41.5 billion. Scaling it to $500 billion will take years, if not decades.
It is, however, clear that an 18% tariff will make Indian goods like textiles, gems, and leather more competitive again.
While who benefited the most from the trade deal will be clear once the finer details are revealed, the reduction in tariffs no doubt marks a diplomatic win for PM Modi after months of constant public jabs from Trump and his aides.
So, what was the trigger? Let's get it straight. India today has an economy too large and too dynamic to be easily cowed by Trump's tariff and trade threats. Despite being labelled a "dead economy" by Trump, three major countries and the European Union (EU) rushed to seal trade deals with India. It created a positive aura, reinforcing India's image as a reliable and stable partner in comparison to a hostile US.
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