Under Donald Trump, just like the past five American presidencies including his own, America’s strategic relationship with India will deepen.
Shared anxiety about China will continue to the glue that brings Delhi and Washington DC together. Quad will become stronger. India will have many friends across departments in the administration on day-to-day functional issues. There will be a broader political and ideological climate with which Indian political dispensation feels comfortable and aligned. In terms of defence, intelligence and security, and at times of national security crises, there will be a degree of trust. The potential for tech cooperation will remain deep. And there will continue to be deeper convergence in West Asia as Israel-Saudi Arabia normalisation happens and doors open for the India-Middle East-Europe Corridor.
But just like the past five presidencies, ties will also go through its share of challenges, due to the larger global climate, developments in the US, and the specifics of bilateral ties.
There will be greater strategic uncertainty driven by Trump’s somewhat chaotic management of US foreign policy. There will be a lot of second-guessing about Trump’s larger strategic commitment to Indo-Pacific, yet, paradoxically, there will be greater strategic asks from India in the name of burden sharing. The scale and depth of bilateral defence and tech ties will hinge on India’s ability to offer a robust case of what it brings to the table and Delhi’s utility for Washington. India-US economic ties will go through stresses on both the trade and investment pillars and will need imagination, flexibility and political will to be re-engineered. India will have to explain why make in India and made in America don’t clash. And there will be secondary consequences of decisions that Trump takes for domestic reasons — on energy, climate, artificial intelligence, crypto, immigration, ties with Europe — for both better and worse.
What will work: Politics, strategy, personnel
Three things will work for India.
The first is the broader political vibe between the ruling dispensations. There are enough reliable first person accounts to suggest that Narendra Modi and Donald Trump get along, they have the ability to communicate, they have engaged in difficult conversations and they have sustained a cordial working relationship. As Robert O’Brien, Trump’s last NSA told HT in a recent interview, the US president sees a bit of himself in Modi, his nationalism and his appeal with crowds. There is the memory in both dispensations about how the US and India worked together at three crucial junctures in Trump’s first term — Doklam, Balakot and Galwan — with DC on Delhi’s side all three times. There is a sense in Delhi of what factors motivate Trump and how to play on that. There is a strong ideological solidarity between nationalist conservatives, for they see a common adversary in Islamism, China and the liberal and Left public sphere. In politics and international system, these are not decisive factors but a degree of shared history, personal warmth between principals, and alignment in the worldview of ideological movements propelling the dominant party helps and opens up informal channels of communication.
Two, the shared anxiety about China really matters as a binding force in the relationship. A lot of the strategic, defence, supply chain, and economic convergence is a derivative of that anxiety. The key driver of ties today — technology — is almost entirely a derivative of the China challenge. And a concrete manifestation of that is Quad. Trump takes pride in reviving the grouping and is sending a strong signal to China by holding a meeting of Quad foreign ministers in Washington DC on Tuesday, marking it one of the administration’s first diplomatic engagements. But the story can take three directions. One possibility is Trump maintains a strong but careful posture on China on lines that Joe Biden did; this is good news for Delhi because a lot of what is a derivative of that posture benefits India. The second is Trump intensifies the strategic competition and the possibility of conflict increases; this may result in stronger asks from Delhi and require India to be prepared to make some hard decisions, especially given its public reticence on China despite its immense private lobbying against Beijing. The third scenario — based on Trump’s ties with Elon Musk and Musk’s business interests in China, Trump’s position on TikTok even at the cost of going against a national security consensus, and his penchant for short term dealmaking — is the possibility of a US-China deal of sorts. The contours of any such arrangement will have to be studied but a grand bargain is unlikely. And with anything less, the US national security state will continue to see Beijing as an adversary and US economic planners will continue to do what they can to reduce dependence on China, both of which open doors for India.
And finally, India has got lucky with Trump’s national security personnel picks. National security advisor Michael Waltz, principal deputy NSA Alex Wong, senior director for India in NSC Ricky Gill, secretary of State Marco Rubio, FBI director Kash Patel, head of national intelligence Tulsi Gabbard, Undersecretary of defense for policy Elbridge Colby, and some other appointees at the senior to middle levels in key departments are understood to have a positive view of India, or at least don’t harbour deep hostility. Trump hasn’t made his picks for assistant Secretary of State for South and Central Asia, assistant secretary of defense for Indo-Pacific security affairs, and the US ambassador to India, three other key positions, but the names doing the rounds are largely people India will be comfortable with. This matters because on a day to day basis, having strong functional relationships helps smooth over issues especially when the level of political attention from the top is limited. Sustaining these relationships will be the task of Indian diplomacy in DC.
And so it is this trinity — the personal bonhomie at the top, the political alignment and ideological convergence; the shared China challenge, which gives rise of convergence in many other domains; and the institutional and personnel relationships — that will continue to give ties momentum. The people-to-people ties are a bonus. And the strong business lobbies in the two countries provide an additional layer of comfort.
What will need work: Trade, investment and the unknowns
But the relationship is not on auto pilot and will continue to need work. Two areas in particular will merit attention in Delhi.
The first is the broader economic relationship.
One axis is trade, where Trump is very obviously peeved about India’s trade surplus of over $40 billion with US which he does not attribute to Indian competitiveness but Indian tariffs that, in his worldview, make American exports uncompetitive but leave India to leverage American market. It is not clear if Trump will impose across the board tariffs on all countries with a higher tariff for China (a scenario that’s most manageable for India since terms of trade are likely to even out with the rest while China loses the most); or whether he will impose across the board tariffs on India along with select other countries with which US shares a higher deficit (a worrying scenario for both Indian dispensation and Indian exporters), or whether he will target only specific Indian sectors for higher tariffs (which is not positive but leaves room open for negotiations, contingent on which sectors are hit and to what degree). It is also not clear given the composition of the Indian export and import basket what Trump will target.
But the broader motivation underpinning Trump’s possible actions remains a deeply held belief that India has exploited American markets without giving a fair share of its market to American producers. If India can find a way to reframe this understanding embedded in the Trump ecosystem imaginatively, through astute messaging, through concessions in terms of domestic access where possible, through greater purchases of American goods where feasible, it will help bridge the deficit and make Trump feel he scored a political win.
The second economic dimension is American investment. Besides a few major successes, Apple being the most prominent, India has failed in leveraging the China+1 moment in global boardrooms, with relatively dismal foreign direct investment figures. This has been true even at a time when the US government under Joe Biden was actually pushing American industry to go to India. It is unlikely that the Trump administration is going to do the same. The absence of the expected increase in foreign investment is largely due to the domestic regulatory climate in India, which has been a constant complaint of American businesses and they may well have a more a willing audience in White House. The Indian market is a tempting proposition but it not a sufficient condition, especially at a time where onshoring and nearshoring will rank higher than friendshoring. So despite talk of supply chain resilience, in concrete terms, expect less American effort in sending industry to India, but more American state backing for American industry that may be unhappy with Indian policy framework in key sectors.
And the third related economic dimension is investment in America. Trump sees other countries as having stolen American investment without making investments in America. Indian companies have invested billions in America — the last CII report from 2023 suggests 160 Indian companies have invested $40 billion and created 425,000 jobs, which is two-thirds of the American investment in India. And while this is a talking point in select policy gatherings, this story largely remains untold because of almost invisible Indian public diplomacy in America and its failure to communicate with the larger American political and public sphere.
India needs to make a better economic case in Washington, a case that encompasses the trade, outbound and inbound investment and technology. Showing to Trump’s orbit where India actually adds value and is not just a notional partner that extracts benefits, while doing the work back in Delhi to revise policies without hurting domestic economy or national interest to balance economic ties, is key to winning over skeptics.
The second broader issue is Trump’s global posture. It isn’t what the US does or does not do with India that is the sole determinant of ties. It is what the US does in the rest of the world.
If America’s ties with Europe fracture, or the US reliability in Europe comes into serious question, then the slow task of persuading Europe to move away from China will suddenly become more difficult. If America decides to stop supporting public health and civil society initiatives in Africa, it only aids the other big power in the region, China. If America is seen to be cutting a deal with China, its own allies in the Indo-Pacific will try to strike a similar bargain before Washington does so to secure their interests. If America pursues policies that only aid climate crisis and steps back from even the tokenistic commitment it makes to climate finance and helping the world adapt, the global south will look to China for help. If America steps back from multilateral organisations, it leaves a large swathe of the international community disgruntled and allows China to play the responsible cop. If Trump creates a permissive structure for crypto, it will have implications for financial policymakers everywhere. If AI gives way to artificial generative intelligence during a Trump presidency, a possibility that Sam Altman has predicted, Trump will have ways of influencing AI policy and winners and losers of the tech revolution in dramatic ways with global consequences.
India can do little to influence these policies, but will have to keep a close watch on Trump’s externally and internally disruptive actions, for those will have profound consequences and not always in happy ways.
Despite all the challenges of the past quarter of a century, the India-US story has been defined by growth, optimism, energy and new ideas. The fact that Bill Clinton, George W Bush, Barack Obama, Donald Trump and Joe Biden didn’t agree on much but agreed on the importance of India and the fact that it was in American interest to invest in the relationship and draw India into a broad policy alignment incrementally speaks of what is now an enduring bipartisan consensus in Washington. This consensus is born out of global circumstances and geopolitics. But India has shaped this consensus and benefited from it. It has been hard work and sustaining that story over the next four years will require the same degree of work and imagination that has brought ties this far.