New Delhi: As negotiations over an Indo-US trade agreement approach the one-year mark and Washington's 50% tariff on Indian goods remains in place, US President Donald Trump on Wednesday (January 21) said he believed the two sides would reach a “good deal”.

Asked for an update on the trade talks, Trump, who is at the World Economic Forum's annual summit in Davos, told Moneycontrol that he has “great respect” for Prime Minister Narendra Modi. “He's a fantastic man and a friend of mine,” the president said.

“We are going to have a good deal,” he added, declining to comment on when he expects the agreement to materialise.

Although talks over a trade deal began soon after Modi met Trump in Washington in February last year – barely a month into the president's second term – Washington's demands that India open up its agricultural and dairy markets to US goods, and New Delhi's sustained purchases of Russian crude oil, have been sticking points for either side.

Washington in August doubled its tariffs on Indian goods to 50% as an ostensible ‘penalty’ for buying Russian oil. The levy remains in place and India has cut back on its purchases of the crude.

Earlier this month, US commerce secretary Howard Lutnick claimed that India and the US were close to signing a trade pact around July but that Modi's reluctance to seal the deal over a phone call with Trump had caused New Delhi to slide down Washington's order of priorities. The Indian government said the official's remarks are “not accurate”.

According to Lutnick's version of events, the US's deadline for India to clinch the deal came about a month after Modi and Trump had a reportedly tense phone call in which the prime minister disagreed with the latter's repeated claim of having precipitated the India-Pakistan ceasefire in May.

Since then Trump has continued to refer to Modi along the lines of a “good guy” with whom he has a “very good relationship”, although in the same breath he has also sought to depict the prime minister in unflattering terms.

Amid the uneasy relationship between the two sides, Trump has now invited Modi to join his ‘Board of Peace’ initiative in a move that confronts Raisina Hill with a difficult choice due to the proposed body's broad scope, its composition, the president's unrestrained powers over its functioning and its implicit goal of sidelining the United Nations.

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