U.S.-India Ties Patch Up as Trade Talks Resume Amid Lingering Friction

The United States and India are quietly patching up a relationship that had shown signs of strain, focusing on practical cooperation and a cautious economic reset even as personal trust between Prime Minister Narendra Modi and former President Donald Trump remains frayed. Both governments continue to view a stable, broad partnership as essential to managing regional security and economic competition, particularly with China in mind. Yet the underlying dynamic is transactional more than intimate, with steady alignment on strategic goals but limited optimism about restoring the personal rapport that once underpinned their ties.

Tensions between the two sides were sharpened by episodes that stretched the relationship during Trump’s tenure. When fighting erupted in May between India and Pakistan after a terrorist attack in Indian-controlled Kashmir, Trump sought to insert himself as a peacemaker, assigning Vice President J. D. Vance and Secretary of State Marco Rubio to de-escalate the flare-up. Modi’s camp had been preparing a joint public push to end the fighting, but Trump asserted personal credit for progress, even as Islamabad pressed for recognition of his role. The diplomacy collided with Narendra Modi’s frustration when Pakistan floated the idea that Trump deserved a Nobel Peace Prize for his efforts. In the weeks that followed, Trump responded with a set of energy, cryptocurrency and minerals deals with India, even as he pressed Modi to back his long-standing bid for a Nobel prize. The episode left Modi wary and heightened the sense that the relationship hinged more on leverage and personalities than on durable trust.

The friction broadened when Washington accused New Delhi of diverging too far from U.S. policy on sanctions against Russia. In August, the United States placed a 50% tariff on Indian imports tied to India’s ongoing purchases of Russian oil, a move Modi publicly receptions as politically intrusive at a moment when Delhi sought to diversify its energy sources and maintain strategic autonomy. In response, Modi signaled where his calculations lie in the broader regional balance by accepting an invitation from China’s Xi Jinping to attend the Shanghai Cooperation Organisation summit in Tianjin, which highlighted China’s growing diplomatic weight. Modi’s high-profile ride with Russian President Vladimir Putin in a Kremlin limousine—the symbolism read as a show of resolve—underscored India’s intention not to be pushed around by Washington. He also left Beijing before a triumphalist military parade, signaling that enduring interests would continue to govern India’s diplomacy with both rivals and partners on the world stage.

Washington and Delhi remain cautious about China’s expanding influence and Xi’s stated intent, but there are signs of a more workable equilibrium. Analysts describe a floor under the relationship rooted in shared geopolitical and commercial interests, even as the personal rapport between Modi and Trump remains diminished. Officials on both sides have signaled a willingness to move past the loudest flashpoints and to pursue concrete progress in trade and technology, with a timeline that includes a potential formal agreement by the end of the year. In late September, both governments reportedly agreed not to demand information on source code or other proprietary knowledge as a precondition for U.S. companies doing business in India, a concession that would lower barriers for digital and software-enabled trade. U.S. negotiators also expect India to ease restrictions on American soy imports, a policy shift that could boost U.S. farmers at a time when China’s demand for U.S. agricultural products has slowed.

The two sides are keeping channels open for a broader meeting on the sidelines of the East Asia Summit in Malaysia in October, a gathering that could signal a renewed momentum for talks and help negotiators build toward a formal trade agreement. Yet even with these openings, the relationship faces inherent limitations. The personal trust that once anchored the Trump-Modi arc has not been restored, and the underlying transactional calculus—how much political capital each side is willing to allocate to the other—will likely define the pace and scope of future cooperation. Look ahead to the near term, and a more predictable, businesslike partnership still looks likely to endure, reinforced by common interests and a practical approach to managing competition with China. New irritants will inevitably surface, as shown by policy moves such as the H-1B visa changes that affect Indian professionals and the political calculus surrounding high-skilled immigration. For Modi, the question remains stark: what will Washington conjure next, and how will that shape India’s choices on energy, technology, and global diplomacy as the world’s two largest democracies navigate a complex, multipolar era?