Modi-Trump talks shake markets, data to have bigger impact

When Prime Minister Narendra Modi met with President Donald Trump recently following Trump's return to power, they pledged to enhance United States and India trade relations, setting an ambitious goal of $500 billion by 2030.

- RITWIK MUKHERJEE

Their negotiation teams have also been directed to try and achieve a deal by Autumn 2025.

The terms of this deal are likely to reduce tariffs and other barriers on textiles, electronics, engineering, and other industries.

The recent fluctuations in the Indian market have been caused by these Modi-Trump economic talks, said Justin Khoo, Senior Market Analyst - APAC, VT Markets.

Moreover, India also pledged increased energy purchases from the United States, which will increase India's spending on oil and gas from $15 billion to $25 billion to improve energy security and help resolve trade deficits.

US President Trump made the announcement of his new "reciprocal" tariff plan, where he applies the same duties onto other high-tariff countries.

While self-benefitting trade practices were set in place, this policy has introduced short-term uncertainty.

Prime Minister Modi's visit also included discussions on defence cooperation, including the potential sale of F-35 fighter jets to India.

This is part of a wider ten-year defence agreement that intends to improve the military capability of India and its influence on regional security issues.

In terms of security and immigration, Trump also supported the extradition of the person responsible for the 2008 Mumbai attacks as a breach of diplomacy to bolster trust between both countries.

February 14, 2025 proved to be an eventful day as Modi's trip.

Indian economic indicators responded immediately, and statistics show that India suffered a 0.5 per cent dip as the market opened early last week.