India Treads Cautiously as Trump Seeks Fresh Start With Modi

Donald Trump shakes hands with Narendra Modi during a bilateral meeting at the G7 Summit on June 17. Photographer: Anna Moneymaker/Getty Images Photo by Anna Moneymaker /Getty Images

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(Bloomberg) — US President Donald Trump showered Indian Prime Minister Narendra Modi with praise in their first in-person meeting in more than a year.

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He called Modi a long-time friend and described him as a shrewd negotiator on trade, who may look “like an angel, but actually, he’s as tough as a killer.”

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Modi, by contrast, was relatively restrained. Sitting next to Trump after the two held a bilateral meeting on the sidelines of the Group of Seven summit, Modi largely spoke from prepared notes. He said the two sides had productive meetings and thanked Trump for his role in restoring peace in the Middle East, but stopped short of calling the US president a friend, as he’d done in the past.

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The tone suggests a new cautiousness from New Delhi as both sides look to reset their relationship after more than a year of tensions over everything from tariffs, to Russian oil, to Pakistan and now, the Iran war. With many of those frictions remaining, analysts say it will take more than friendly handshakes and smiles to get ties back on track.

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“The past eighteen months have been a wake-up call about the risks of placing too many eggs in the American basket,” said Milan Vaishnav, director of the South Asia Program at the Carnegie Endowment for International Peace in Washington. “India will remain engaged with the United States, but it will also become more cautious and intensify its efforts to diversify its partnerships.” 

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Modi used part of his trip to the G7 meeting in France to do just that. He prioritized meetings with so-called middle power nations, like Canada and the UK, to showcase growing economic ties. On Wednesday, the UK announced its £4.8 billion ($6.4 billion) trade deal with India would enter into force on July 15, while agreements with Canada and the European Union are expected to be signed later this year.

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India was one of the first in line to begin negotiating a trade deal with the US when Trump returned to the White House last year, but still an agreement remains elusive. Although Trump said Wednesday the two sides are “very close,” analysts say there’s reason to be skeptical.

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“We’ve been hearing for months that the trade deal is close, and that it’s just around the corner, and yet there’s still no deal, and that suggests a problem,” said Michael Kugelman, a senior fellow for South Asia at the Atlantic Council. 

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US Trade Representative Jamieson Greer is scheduled to visit India next week to push the talks forward. Indian officials maintain that finalizing the deal is unlikely until the outcome of two so-called Section 301 trade probes the US is conducting to lay the groundwork for more tariffs.

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Beyond difficult trade negotiations, New Delhi has been unsettled by Washington’s renewed engagement with Pakistan. Trump has repeatedly claimed credit for helping end the brief four-day military clashes between India and Pakistan last year, an assertion New Delhi has firmly rejected.