Indian Prime Minister Narendra Modi (L) and President Trump (R). Photo: Mark Wilson/Getty Images

President Trump and Indian Prime Minister Narendra Modi are rushing to finalize trade deal terms ahead of the United Nations General Assembly at the end of the month, reports Reuters.

Why it matters: "A deal between the world's most populous democracies would be a welcome victory for Trump" as a trade war with China rages on, writes Reuters. Modi and Trump have been using tariffs in an attempt to "boost investment in manufacturing" in both countries.

The deal would decrease some tariffs on U.S. produce and bring back "preferential treatment" for a collection of Indian exports, per Reuters.

  • Talks have largely focused on India cutting agricultural tariffs against almonds, pork, dairy and other goods.
  • India wants its special status under the Generalized System of Preferences (GSP) restored for a few more years "to boost exports dampened by sluggish global demand," writes Reuters.

Context: The U.S. cancelled duty-free access under GSP for $5.7 billion worth of Indian exports this June, which prompted India to respond with tariffs against 28 U.S. products, according to Reuters.

  • The U.S. also has problems with India's e-commerce rules that set up more barriers for American companies like Amazon and Walmart — as the Indian online market is expected to reach $200 billion by 2027, per Reuters.

What's next: Trump is planning to meet Modi in Houston on Sunday for a "Howdy Modi" event, intended to signal improved relations between the 2 countries. About 50,000 people are expected to attend — the largest live audience event for a foreign leader other than the Pope, reports the Washington Post.

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