New Delhi, Dec 12, 2025: Prime Minister Narendra Modi and US President Donald Trump spoke on the phone on Thursday evening in what Indian officials described as a “warm and engaging” conversation. The discussion focused on enhancing bilateral trade, deepening defence and security cooperation, and addressing regional and global developments, amid signs that both countries may be moving closer to a comprehensive trade agreement.

This was the first phone interaction between the two leaders since October, following a two-day visit by the new US deputy trade representative, Rick Switzer, to India. During his visit, Switzer engaged with top Indian officials, including commerce secretary Rajesh Agrawal, to discuss ways to advance trade and investment relations.

After the call, PM Modi shared a post on X (formerly Twitter), stating: “Had a very warm and engaging conversation with President Trump. We reviewed the progress in our bilateral relations and discussed regional and international developments. India and the US will continue to work together for global peace, stability and prosperity.”

Trade Talks and Economic Engagement

Officials familiar with the conversation said that both leaders emphasised sustaining momentum on bilateral trade. They reportedly explored avenues for cooperation in critical sectors, including technology, energy, defence, and security, aligned with the India-US COMPACT (Catalysing Opportunities for Military Partnership, Accelerated Commerce and Technology), first unveiled during their February meeting in Washington.

Commerce Minister Piyush Goyal, speaking in Mumbai, reiterated that a trade deal would only be finalised when both countries benefit. Responding to US Trade Representative Jamieson Greer’s claim that Washington had received India’s “best ever” offer, Goyal said, “His happiness is very much welcome. I do believe that if they are very happy, they should be signing on the dotted line.”

Goyal added that negotiations have been substantive and steady. He cautioned against strict deadlines, noting that “a deal is only done when both sides stand to benefit. And I don’t think we should ever negotiate with deadlines or hard stops because you tend to make mistakes.”

Chief Economic Advisor V. Anantha Nageswaran expressed optimism that a trade agreement could be concluded by the end of India’s fiscal year. Speaking to Bloomberg TV, he said, “I will be surprised if the India-US deal is not sealed by the end of the financial year. I was hoping that something would be done by the end of November. As and when the deal is agreed upon, there will be a huge weight lifted off the shoulders of the Indian markets.”

Context of India-US Trade Relations

Relations between India and the US had hit a low point earlier this year after the Trump administration imposed 25% reciprocal tariffs on Indian goods and an additional 25% penalty on India’s Russian oil purchases. The combined 50% tariff is the highest levied by the US on any country, sparking widespread concerns among Indian exporters, investors, and farmers.

Indian officials, including External Affairs Minister S. Jaishankar, have stressed that New Delhi is open to a reasonable trade agreement with Washington, but not at the cost of national interests or the welfare of farmers, petty traders, and the middle class. Jaishankar has described the ongoing negotiations as a careful effort to find “a landing point for our respective trade interests”, noting the broader implications for India’s economy and agricultural sector.

Defence and Strategic Cooperation

Beyond trade, the call also touched upon defence and security collaboration. The leaders reviewed ongoing initiatives under the COMPACT framework, which aims to catalyse cooperation in military partnerships, advanced technologies, and critical infrastructure projects. Both sides reportedly expressed satisfaction at the steady strengthening of bilateral ties, particularly in sectors critical to regional stability and global security.

Regional and Global Developments

The conversation also covered regional and international developments. While details of these discussions were not disclosed, Indian officials highlighted that both leaders agreed on the importance of close coordination to address shared challenges and advance common interests in the Indo-Pacific region and beyond.

Outlook

The “warm” phone call signals a renewed willingness on both sides to resolve trade tensions and expand cooperation across strategic areas. Analysts see the conversation as a step toward normalising relations and potentially finalising a trade deal that balances the interests of both nations.

As negotiations continue, Indian leadership remains committed to protecting domestic stakeholders while seeking opportunities for enhanced trade and strategic collaboration with the United States. The dialogue between Modi and Trump is expected to be followed by further engagements between trade and commerce officials from both countries to finalise the remaining aspects of the deal.