A lot of attitudinal and practical steps are called for because the US is not going to be benign.  

In light of apprehensions about Donald Trump’s presidency in the United States, his first interaction with Indian Prime Minister Narendra Modi over the phone earlier this week was pleasant enough to warrant hopes of a smooth Trump 2.0 as far as India-US relations are concerned.

Trump was characteristically business-like, spelling out his concerns without mincing words. A terse statement released by the White House said that the President emphasised the importance of India “increasing its procurement of American-made security equipment and moving toward a fair bilateral trading relationship.”

But to his credit, Trump personally ventured to soften the impact when he told the media that Modi will visit Washington in February. That laid to rest speculation that Indo-US ties have weakened because Trump did not invite Modi to his inauguration when he had invited the Chinese President Xi Jinping.

However, Trump’s aggressive American nationalism could stymie plans by countries to exercise “strategic autonomy in a multi-polar world.” Unlike the mild-mannered Joe Biden, Trump does not believe in allowing countries to exercise strategic autonomy in a world dominated by the US. His effort will be to Make America Great Again by pursuing its interests unilaterally. This was reflected in his aggressive pronouncements on the Panama Canal, Canada, and Greenland.

Trump’s US is not going to be benign. He will unabashedly seek reciprocity in America’s relations with other countries, irrespective of race, historical ties, or the form of government. He will not merely lament that partners are not doing enough to reciprocate what they get from America, as former US Ambassador to India Eric Garcetti publicly did in Kolkata last year. The new administration will be blunt in demanding its due—or, shall we say, its pound of flesh.

Trump’s coming did seem ominous for India, as he spoke about countering high Indian tariffs with steep hikes in American tariffs. He might insist that India buy US oil or products or facilitate US investments in return for obtaining advanced US defence technology and strategic intelligence.

Both Trump and Secretary of State Marco Rubio have highlighted the issue of illegal or undocumented immigration from various countries, including India. The numbers relating to India vary—from 18,000, according to India’s estimation, to hundreds of thousands, as per unofficial US estimates. There could be disputes over numbers and the identification of illegal immigrants. As a result, the identification and deportation of illegal immigrants could have political ramifications in India.

H-1B Visa Issue

The H-1B visa is an issue which has bedevilled Indo-US relations for long. The H-1B is a non-immigrant visa that allows foreign workers to temporarily work in the US in specialty occupations. Indian-origin tech companies, such as Infosys, Tata Consultancy Services, and HCL America, account for about a fifth of the H-1B visas issued.

Therefore, the American right wing’s tirade against immigration has created fears among potential H-1B visa holders. Trump’s employment plan for Americans includes reducing H-1B visas, which would certainly affect the Indian middle class—Prime Minister Modi’s political base.

However, Trump is not entirely opposed to the H-1B visa, as he believes that the US needs foreign talent to boost local production, exports, and job creation for Americans. Some of his top lieutenants, such as Elon Musk, are strong supporters of quality immigration through the H-1B visa.

India could argue its case on strong grounds, former diplomat Jayant Prasad says. He suggests that India emphasise that the H-1B visas given to Indian workers trained in science, technology, engineering, and mathematics (STEM) are critical for US industry. In 2023, Indian professionals constituted over a fourth of the 3.5 million STEM workers in the US. A 2022 US government report on US Multinational Enterprises (USMNEs) states that Indians constituted 12% of the US worldwide workforce of 44.3 million. India accounted for 8% of the US$448.9 billion research and development expenditure of USMNEs.

The 320,260 Indian students in US institutions contribute US$ 7.7 billion annually to the US economy. Indian tourist footfalls are increasing; in 2023, the US embassy and consulates in India issued 1.4 million visas.

Tariffs Issue   

Tariffs are a core issue for Trump, who plans to slap high tariffs on “tariff kings” like India and China. Any hike in US tariffs will adversely affect India as the US is India’s largest trading partner, accounting for over US$ 190 billion annually. 80% of India’s IT exports go to the US.

Some Indian experts say that India should retaliate, as the US is also a “tariff king.” The Hindu, quoting the WTO’s World Tariff Profiles 2023, notes that the US imposes more than 100% duty on many items exported by developing countries.

But others suggest that India should focus on making itself more attractive for American investments. India should improve its ease of doing business, reduce costs, and streamline regulatory processes. Dispute resolution must be made quicker and more efficient. In fact, Trump’s economic policies could push India to improve its competitiveness against China in exporting to major markets like the US.

Building the Existing Base

The potential for Indo-US economic engagement is substantial and should be maximised. Jayant Prasad points out that US foreign direct investment (FDI) stock in India stood at $51.6 billion in 2022. The two countries collaborate across key technological and innovation sectors, including agriculture, blockchain, clean energy, cyber sciences, next-generation telecommunications, health security, and space.

Since being elevated to Strategic Trade Authorisation Tier 1 status in 2018, India has gained licence-free access to a wide range of US-regulated technologies. India has joined the Artemis Accords, which set principles for civil space exploration. It is also part of the Mineral Security Partnership and the Initiative on Critical and Emerging Technologies. The two nations have concluded an MoU on the Semiconductor Supply Chain and Innovation Partnership.

Defence Relationship

India has greatly benefitted from its defence ties with the US. But Americans feel that India must do more to align with their strategic interests, particularly in countering China. The challenge for India lies in balancing these expectations without going to war with China. As former Ambassador Garcetti noted, India is currently neither fully meeting US expectations nor actively pursuing détente with China, though Foreign Secretary Vikram Misri is making efforts in this direction.

Indo-US Defence Bill

Regardless of its ties with China, India must maintain a robust defence relationship with the US due to their political and ideological affinities. India is particularly keen on the passage of the India-US Defence Bill, introduced by Marco Rubio in July 2024. Now serving as Secretary of State, Rubio could help push the bill forward. However, the US has so far remained silent on the matter, focusing instead on tariffs and illegal immigration in discussions with Foreign Minister Subrahmanyam Jaishankar.

If passed, the bill would be a major boost for the Modi government and Indo-US relations. It proposes granting India the same status as US allies such as Japan, Israel, South Korea, and NATO members. It also seeks to exempt India from the Countering America’s Adversaries Through Sanctions Act (CAASTA) and impose sanctions on Pakistan for sponsoring terrorism against India.

“Communist China continues to aggressively expand its domain in the Indo-Pacific region, all while it seeks to impede the sovereignty and autonomy of our regional partners. It’s crucial for the US to continue its support in countering these malicious tactics. India, along with other nations in the region, is not alone,” Rubio said introducing the bill in the Senate last year.

Among other things, the bill would set a “Statement of Policy” that the US will support India in its response to growing threats to its territorial integrity, provide necessary security assistance to India to deter adversaries and cooperate with India for defence, civil space, technology, medicine, and economic investments.

The bill proposes a ban on Pakistan from receiving security assistance. It requires a report to Congress on Pakistan’s use of offensive force, including through terrorism and proxy groups, against India; and bar Pakistan from receiving security assistance if it is found to have sponsored terrorism against India.

Slow Progress on Existing Agreements

However, the India-US Defence Trade and Technology Initiative has little to demonstrate a dozen years after its launch, Jayant Prasad points out. As a “Major Defence Partner”, India is still not treated on par with US allies and NATO members, despite having signed the “foundational” agreements that are a prerequisite for a closer defence relationship, including the Logistics Exchange Memorandum of Agreement, and despite the unprecedented Indian commitment to provide help “for maintenance of forward-deployed US naval assets,” Prasad says.

Addressing the Raisina Dialogues in New Delhi in February 2024, Vice Adm. Girish Luthra said: “There is a need for a clearer enunciation of deliverables, and shared commitment to deliver the same. The two countries need to move from a series of frameworks and core groups to executing and translating promises into reality. The all-important phase of delivery must begin soon.”