"We are in the early stages of discussion for an incredible trade agreement to reduce barriers of investments, between the US and India and I am optimistic that working together, the Prime Minister and I can reach a fantastic deal that's good and even great for both of our countries," Trump said, adding the Indian Prime Minister is a "very tough" negotiator.
The US president said that commerce between the two nations has increased by more than 40 per cent.
India is now a major market for American exports and the US is New Delhi's largest export market, he said.
Trump added a "booming" America is a great thing for India and also for the world and "that's why, we are so happy to announce that we have had the greatest economy ever in the history of the US".
"In the US, we have proven that the best way to attract jobs and opportunity is to reduce burdens on business, knock down barriers to new investments and eliminate unnecessary bureaucracy, red tape, regulations and taxes," he said.
Trump added that Prime Minister Modi has already made significant reforms in his country, and the world is looking forward for even more rapid improvement in India's business climate.
"Under his (Modi) leadership, he wants to do and he is doing this at a record pace," Trump added.
The remarks of the US president on trade agreement with India assumed significance as there were expectations of announcement of a deal during his visit.
Officials of both the countries are yet to resolve issues pertaining to politically sensitive agriculture, dairy, data protection and localisation, e-commerce and other sectors.
An official has said that the deal between the two countries should be mutually beneficial and should not compromise India's interest.
According to the official, the US was adding more to its list of demands as trade talks were progressing.
As the US is seeking greater market access for its dairy products, India has conveyed to them that dairy and milk products should not be derived from animals that are fed internal organs, blood meal, or tissues of ruminant origin as it would hurt sentiments of the society at large.
The US also wants greater market access for its farm goods like walnut and apple, removal of price cap on medical devices like coronary stents, significant removal of customs duty on 1,600 cc bikes, making it competitive for likes of Harley Davidson to enhance their footprints in Indian markets, cut on import duties on some information and communication technology products.
The US has also raised concerns over high trade deficit with India.
On the other hand, India is seeking resumption of export incentives by the US, under its Generalized System of Preferences (GSP) programme.
Under this programme, India had earlier exported goods worth USD 6.5 billion. So if the US would resume these incentives, it would seek greater market access equivalent to this amount at least.
Under GSP, India was exporting 1,900 items from sectors like chemicals and engineering. It was rolled back by the US last year.
India is also demanding cut in visa fee for domestic professionals, exemption from high duties imposed by the US on certain steel and aluminium products, and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering.
US President has time and again termed India as a 'tariff king', an allegation strongly opposed by India.
In June last year, India announced a hike in customs duties on as many as 28 US products, including almond, pulses and walnut, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium.
The US has surpassed China to become India's top trading partner, showing greater economic ties between the two countries.
In 2018-19, India's exports to the US stood at USD 52.4 billion while imports were USD 35.5 billion. Trade deficit dipped from USD 21.3 billion in 2017-18 to USD 16.9 billion in 2018-19.
India received FDI worth USD 3.13 billion from the US in 2018-19, higher than USD 2 billion in 2017-18.
Generally in a free trade agreement, two trading partners significantly reduce or eliminate customs duties on maximum number of goods traded between them.
Trump said that he is delighted to be joined by dozens of Indian women entrepreneurs who are helping to build India's future.
"They are great and natural entrepreneurs and I just say to the men be very careful, they are really good," he added.
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