Analysing India-US relations under Trump 2.0
Trade has long been the fulcrum of the India-US relations, often fraught with tension. US President Donald Trump, known for his hardline stance on trade imbalances, previously labelled India the "tariff king" and pushed for reductions on American goods. Indian Prime Minister Narendra Modi's recent visit to Washington attempted to strike a delicate balance; India is likely to increase US oil and gas imports while cutting average tariffs from 13 percent to 11 percent in its federal budget in a bid to pre-empt Trump's tariff moves.
During the meeting, the two leaders also set an ambitious goal of boosting bilateral trade to $500 billion by 2030, signalling optimism. However, beneath this diplomatic handshake lies a lingering question: will Trump impose fresh tariffs that could derail this vision?
For all latest news, follow The Daily Star's Google News channel. Trade analysts warn that the real risk for India lies beyond tariffs. Trump's non-tariff barriers, VAT adjustments, and potential WTO disputes could complicate India's access to the US market at a time when India is already pressed by a slowing economy and sluggish demand.
Despite these uncertainties, there is a silver lining: China's economic decoupling from the US remains a strategic advantage for India. With Washington seeking alternatives to Chinese supply chains, India could emerge as a preferred manufacturing hub for US companies, particularly in semiconductors, renewable energy, and pharmaceuticals.
Trump's announcement of expanding US military sales to India, including potential access to F-35 fighter jets, which marks a significant shift to deepen the India-US strategic relationship. If the deals endure, they would further solidify India's position as a major defence partner of the US and strengthen defence diplomacy between the two nations.
However, this also raises crucial geopolitical dilemmas for India. There has been a precipitous drop in its share of arms from long-standing ally Russia, which supplied 76 percent of its military imports in 2009-13 but only 36 percent in 2019-23, according to SIPRI data. The push towards US defence systems could potentially affect New Delhi's long-standing military cooperation with Moscow and shake up the delicate balance that India continues to strike between its relations with Russia and the West.
Moreover, the Quadrilateral Security Dialogue (QUAD)—the Indo-Pacific alliance comprising the US, India, Japan, and Australia—is expected to intensify under Trump's counter-China strategy. According to the joint statements issued by India and the US after the two leaders met, Modi and Trump are expected to activate new initiatives under the QUAD grouping and convene partners from the India-Middle East-Europe Corridor, and the I2U2 Group is expected to announce new initiatives. India is set to host this year's QUAD meeting, which, according to analysts, could advance a multifaceted bilateral partnership.
But perhaps the most immediate and direct impact of Trump's policies in India would result from the US president's immigration crackdown. The US deported 104 Indians on the longest such military flights used thus far, before Modi's visit to Washington. During his first term, Trump tightened H-1B visa regulations, dealing a blow to Indian professionals in the US technology sector. His second term is likely to see a return of these restrictive measures, which could hurt Indian IT firms, disrupt the $150 billion outsourcing industry, and slow the flow of South Asian talent to Silicon Valley.
In an unusual diplomatic move, Modi publicly assured Trump that India would take back undocumented Indian migrants from the US. While this signals compliance with Trump's anti-immigration drive, it also reflects India's attempt to avoid deeper tensions on this front. However, concerns regarding skilled Indian professionals and students who may face heightened visa barriers in the coming years remain.
On the other hand, Trump's unpredictable approach to Pakistan and Afghanistan remains a major concern for India. His first term saw a sharp reduction in US aid to Pakistan, coupled with strong rhetoric against cross-border terrorism. But Trump offered to mediate the Kashmir conflict during former Prime Minister Imran Khan's bilateral visit to Washington during his first administration, after which Trump said he had heard a "very aggressive statement" from Modi, according to a report by Al Jazeera in 2019. If Trump revisits such rhetoric, it could create fresh diplomatic tensions.
A major diplomatic win for India came in the form of Trump's approval of the extradition of Tahawwur Rana, a Pakistani-origin businessman accused of involvement in the 2008 Mumbai attacks. Preliminarily, this move signals a tougher stance against terrorism-related cases involving Pakistan-based networks.
In another notable move with far-reaching consequences, Trump's executive order has suspended all USAID and IRI funds to South Asian countries, including Bangladesh and India. If these funds are not reinstated after the initial 90-day review period, crucial development projects across the region—spanning healthcare, education, and infrastructure—could be severely impacted.
One of the most striking aspects of the Trump-Modi meeting was the conspicuous absence of discussions on human rights, press freedom, and religious minorities. While the Biden administration often raised concerns over democratic backsliding in South Asia, Trump's foreign policy is expected to remain transactional, prioritising economic and security interests over democratic values. India, where the BJP has been accused of cracking down on opposition and causing the country's democracy backsliding, could embolden the BJP government to take a harsher stance on dissent, media freedoms, and minority rights without fear of US diplomatic pressure. For Bangladesh, Sri Lanka and Pakistan, where democratic institutions have faced increasing strain, this diplomatic indifference from Washington could also accelerate authoritarian tendencies.
Donald Trump's second presidency presents India and South Asia with a paradox: unprecedented opportunities wrapped in profound challenges. For India, closer defence cooperation and strategic alignment against China are promising. Yet, trade tensions, restrictive immigration policies and the unpredictability of Trump's diplomacy pose real threats. Modi's personal chemistry with Trump may provide some diplomatic cushioning, but it will not override the cold calculus of transactional foreign policy. South Asian nations must now diversify their economic dependencies, recalibrate diplomatic ties and invest in regional cooperation to mitigate the volatility of Trump's second term. As Trump reshapes America's global engagement, the region must master the art of navigating an unpredictable superpower. The next four years will test South Asia's ability to turn challenges into strategic gains, proving that in global politics, survival depends on adaptability.
Dr Rakib Al Hasan is founder and executive director of the Centre for Partnership Initiative. He can be reached at [email protected].
Views expressed in this article are the author's own.
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