Trump softens india stance amid ongoing trade talks

2025-09-10 general

washington, Wednesday, 10 September 2025.
Despite earlier tariff threats and concerns over India’s relationships with China and Russia, the Trump administration is continuing trade negotiations with India. Trump expressed optimism about a deal. He anticipates speaking with Prime Minister Modi soon. The U.S. seeks to address a $45.8 billion trade deficit. This is part of the $129 billion two-way goods trade in 2024. A potential agreement could affect semiconductor supply chains and market access for major tech companies.

Trade negotiation landscape

President Trump’s recent statements signal a potential thaw in trade relations with India [1]. This contrasts with earlier threats of increased tariffs and concerns over India’s relationships with China and Russia [1]. Trump conveyed optimism about reaching a trade agreement with India and anticipates discussions with Prime Minister Modi in the near future [1][2]. These negotiations aim to address existing trade barriers between the two nations [1][7]. Both leaders expressed confidence in achieving a successful resolution that benefits both countries [1][2].

Impact on indian economy and currency

Earlier in the year, India’s chief economic advisor cautioned that a 50% tariff imposed by the U.S. on Indian exports could reduce India’s GDP growth by 0.5% [1]. The rupee has faced depreciation pressures, with the USD/INR exchange rate climbing to 88.1740 on August 29, 2025 [4]. This reflects a 0.65% increase from the previous day, and a 5.13% drop over the past year [4]. Currency analysts predict the Indian Rupee will trade at 87.84 by the end of the current quarter and 88.55 within a year [4].

Investor considerations

Investors should closely monitor developments in U.S.-India trade negotiations, as outcomes could significantly influence market sentiment [1][4]. Sectors like semiconductors and companies such as Nvidia, TSMC and ASML may be particularly affected by tariff adjustments and market access changes [GPT]. Renewed trade optimism could lead to increased foreign investment in India, benefiting companies like Indian Oil Corporation [2][7]. Conversely, failure to reach an agreement may exacerbate currency pressures and hinder economic growth [1][4].

Bronnen

trade negotiations tariff barriers