Introduction
Ms. Indrani Bagchi examines the deteriorating US‐India relationship under President Trump’s second administration,
highlighting unprecedented challenges and charting a path forward.
The Lowest Point Since 1998
I haven’t seen the US-India relationship in such a low position as I see it today. The only time it was worse than this was just after the nuclear tests in 1998. We are in a place which is very strange and very unusual for India.
India had basically believed that Trump’s second administration would be a continuation of his first term. On the day of the US election, November 5th, I was coincidentally visiting the United States, walking down the streets of New York City. It was patently clear to me then that there was a very significant cultural shift in America that we had not caught earlier and we did not fully understand. I don’t think we fully understand it even now because that is also an evolving situation, but there is a distinct cultural shift alongside the political shift that is there for all to see.
Understanding the New American Administration
From the beginning, India reckoned that we would have trouble on a couple of fronts. We would have trouble on the tariff front, and this is not the first time President Trump has declared India to be the tariff king of the world. For anybody in the economic sphere, it has been evident that for years India has relied on heavy tariffs to protect its industry, even when the industry did not need protection. In a sense, it is a comeuppance to India’s economic management, and to that extent, we probably could have taken some steps in anticipation.
The kind of American politics dominating America today is a lot more right-leaning, which is fine—we’ve had right-leaning presidents and administrations before. But this is a very different kind. This is almost a xenophobic right, and that’s something we need to be very clear about. It is also very openly and determinedly white. Another aspect is the much more traditional, deeper Christianity fueling not just religious sentiment but also political sentiment. All of these come together in a mix that for a country like India is difficult to grasp all at once.
Add to this the mercurial personality of President Trump, the constant quest for personal aggrandizement and for global validation of whatever he is doing. An additional layer that complicates matters is the fact that this is an American president that has no qualms about making money, whether it is for America or whether it is for friends and family enterprises. He has no qualms about monetary benefits playing a very signal role in his policies.
This president comes with a very interesting mandate: to weed out immigrants, to start the process of making America self-reliant, and a mandate to basically charge the world for creating a great America again—that the world owes America the tools it needs to become great again.
The End of American Hegemony
Lastly, under President Trump’s leadership, this is not America the hegemon that we saw in the last 50 years. He is an isolationist. He’s perfectly happy to wall America in. If you see their latest national defense strategy, it’s pretty clear that the defense of the homeland is paramount. He’s not in the business of great power competition. He’s gone beyond that competition with China—he’s not in that game. He’s perfectly happy to make a deal with China and with Russia. In fact, he wants to make deals with both. What is complicating matters for him is that the rest of his administration is not there with him yet.
India’s Diminished Strategic Value
In the middle of all this is the US-India relationship. India was in many ways the beneficiary of the idea which has been around at least for the last quarter of a century—that the US and India relationship was special, consequential, and important enough in the world as we look at a growing, aggressive, expansionist China. That is something President Trump does not seem to understand or has rejected. That puts India in a much different position.
It basically means that India is sometimes a little more than all his allies and partners, but not much more. He has taken the machete to America’s alliances. Sometimes it might feel that Trump is singling out India for special treatment, but frankly, if you go to Tokyo, they weep. What they have been forced to do is unbelievable. They are in the position of an old military ally of America, terrified of China and believing that there is no other option—that they cannot possibly stand on their own feet without America holding their hand. They have had to give in to humiliating agreements on investments in America that honestly, if given to any Indian government, would have been rejected outright.
Europe is blinded. Europe has no idea whether it’s going or coming, whether they should defend Ukraine or who should defend Ukraine. Ukraine is literally holding the entire continent to ransom because nobody in that continent is contemplating the end of the war. They might be contemplating a ceasefire but not the end of the war. Russia is not winning the war. Russia started the war four years ago believing it was going to finish it in a week. It’s now four years—a stalemate. There is no Ukrainian victory and no Russian victory either, and if we don’t actually address the end of the war, this spillover is going to have additional adverse impact on India.
The Current Crisis
Where are we today with the US-India relationship? We are in the middle of a trade negotiation where India is holding on to its traditional red lines. The US is pushing really hard using every lever at its command to force India to open its agriculture sector. They’ve pulled back on dairies but they’re definitely pushing on the agriculture sector.
Everything, including Russian oil—Trump doesn’t care about Russian oil or Russia—this is a way to push India. The 50% tariffs are punitive action on India. H1B restrictions are equally punitive actions. The reason is very clear: he wants India to pick up the market for maize and soybean that China refuses to buy anymore. India has its own reasons for not opening up these sectors, but Trump is pushing.
What it has done is impact not only the political relationship between India and the US but even if the trade deal is done, there is now a sense of a trust deficit with the US. India and the US have worked for a quarter of a century to build that relationship from a place of no trust to a place of consequential trust. We are now heading back to a very different place.
The entire idea that Pakistan suddenly became attractive to the US in April only because Trump wanted his family to win from a crypto deal in Pakistan is unbelievable. Day before yesterday, President Trump delivered an ultimatum to the Taliban in Afghanistan that he wants the Bagram air base back, which basically means Trump wants to go back into Afghanistan. For anybody who thinks that there is a vision or strategy going on, I don’t think they know what they’re talking about.
Privately, President Trump’s cabinet members tell Indian officials that they have no interest in Pakistan, but that is not what we see. The very fact that Pakistan now gets to use Saudi money to buy weapons which, as we know, will always be directed against India, by itself is an affront and has serious adverse security implications for India.
The Path Forward
How do we deal with this situation? My sense is that we are prioritizing first the trade agreement with the US because the priority is actually to bring those tariffs down. Whatever we may or may not say, America is our biggest market, particularly in the areas being impacted—textiles, gems and jewelry, shrimp, etc. These are heavy employment sectors and it is very important for India to work out a deal with the US to bring those tariffs down.
I see that some change may be in the air because in the last few weeks President Trump has not mentioned India when it comes to tariffs or sanctions on countries buying Russian oil. In fact, he has gone after the Europeans and asked them to sanction the Chinese, but he has very prudently kept India out of this. I suspect somebody has gone to him to say that this is a relationship that you are literally whistling down the wind for absolutely no reason.
The second priority is for India to rebuild its domestic base in a couple of sectors. We need to add to the manufacturing base that we have, which is not very good. We need to bring technology back to India, make it easier for technologies to come back to India, to be designed in India, with innovation in India. We need to find smaller, shorter supply chains—more trusted supply chains. The idea is for us to be doing what we have been trying to do for the last few years, which is build resilient, shorter, trusted supply chains. That project should continue deeply.
Third, on defense, we need to be a lot more forward-leaning. Our defense procurement acquisition system needs urgent improvement. While we prevailed in Operation Sindur, it also exposed many gaps within our systems which, if we don’t address them with a sense of urgency, we might find that the next conflict becomes more difficult. And the next one will happen because Pakistan has now discovered that it has wind beneath its sail, and that wind apparently comes from America.
Finally, we need to have a clearer idea of where we should be diversifying our trade and economic engagements. We should conclude FTA negotiations with both the Gulf countries and Europe. Frankly, we need to be able to have a much clearer trading conversation with America. We are not doing that. We need to be doing that a lot more.
