How India is eyeing long-term benefit under Trump 2.0 – Firstpost

As Prime Minister Narendra Modi meets President Donald Trump, there are several challenges in the bilateral ties where Modi’s Chanakyaniti will have to seek solutions against an unpredictable Trump. This visit covers a lot of ground, including discussions on trade, investment, defence, and energy partnerships. Trump’s narrative of MAGA (Make America Great Again) revolves around ultra-nationalism centered around anti-migrant rhetoric and trade war. Yet India’s prominence in shaping future geopolitics with American centrality cannot be ignored.

Each side demands concessions on every contentious issue to reach an acceptable solution. Both leaders with nationalism and strong ideologies will have to add impetus to the India-US strategic partnership for mutual benefit.

Bridging the Trade Deficit: A Thorny Agenda

For Trump, trade and tariffs are the new weapons that target Mexico, Canada, and China. They remain the domicile sword and a source of tension in US-India relations. Though India was excluded, higher tariffs on Indian exports dangle as much as the threat to impose 100 per cent tariffs on BRICS nations, including India, should India undermine the US dollar.

Trade tensions have been a persistent concern. In the fiscal year 2023-24, bilateral trade stood at $118 billion, with India’s trade surplus reaching $32 billion, a figure that swelled to $45.6 billion in 2024. President Trump has repeatedly criticised India’s high tariffs and the significant trade surplus it enjoys over the United States.

To address these concerns, India has signalled tariff reductions on high-end US automobiles and motorbikes, benefiting companies like Harley Davidson and Tesla.

The 2025 Union budget, presented by Finance Minister Nirmala Sitharaman, hinted at further duty cuts, suggesting a strategic effort to assuage Trump’s demands. Defence equipment imports from the US are also likely to grow to bridge the US trade deficit, induct new technologies, and lessen dependence on Russia. India could also buy more crude oil and LNG from the US.

India’s Commerce Minister, Piyush Goyal, recently said that India is ready to give American products a fair deal on tariffs, as long as American markets also open up fairly for Indian exports. We might see a mini trade agreement that zeros in on lowering import taxes on American-made electronics, medical gear, and chemicals. In return, India would push for fewer restrictions when exporting pharmaceuticals, IT services, and textiles to the US. The US demands in turn will demand safeguards for American IPR and a more transparent regulatory framework.

Geopolitical Factors: Managing Relations with Russia, China, and Iran

India’s long-standing strategic partnership with Russia and its rivalry cum economic linkages with China add complexities to the India-US trade relations. India has sustained its defence and energy cooperation with Russia, with the purchase of S-400 missile systems and importing of Russian crude oil at discounted prices despite the threat of American sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

The geopolitical reality is that both the United States and India have a common stake in countering China’s belligerence and growing economic and military influence in the Indo-Pacific region. India thus plays a crucial role as a member of the Quad alliance and building stronger economic bonds, which helps the US to balance out China’s dominance in global supply chains. Washington would seek to reduce India’s dependence on Chinese imports, particularly in areas like critical minerals, semiconductors, and telecom.

India’s trade relations with Iran remain another irritant for the US. India has seen Iran as a key source of energy and a crucial partner for connectivity initiatives into Afghanistan and Central Asian Republics, and thus the strategic importance of Chabahar Port. US sanctions on Iran have complicated India’s engagement, forcing it to cut oil imports significantly.

Modi’s visit presents an opportunity to negotiate waivers or relaxed sanctions that would allow India to trade with Iran, particularly in energy and infrastructure projects. In exchange, Washington may seek stronger Indian alignment on countering Iranian influence in the Middle East.

Defence and Energy Cooperation: Strategic Ties

Defence has long been a cornerstone of the US-India relationship. Over the last two decades, India has become a major customer of American military equipment. During Trump’s first term, for instance, India inked several large defence deals, including the Seahawk helicopters. India hopes to buy more C-130 Hercules transport planes, P-8I maritime patrol aircraft, and Predator drones from the US to boost its defence capabilities.

Energy cooperation is also shaping up high on the agenda. Under Trump’s first term, India started buying American liquefied natural gas (LNG) and crude oil, broadening its energy sources. With Trump pushing for more US energy production, India could purchase American fossil fuels. At the same time, they could seek cooperation on nuclear energy and renewable energy projects, like solar and hydrogen.

India needs a firm defence pact with the US to keep China at bay and meet the threat from terrorists based in Pakistan. In July 2024, when Secretary of State Marco Rubio was a senator, he presented a bill—the “United States-India Defence Cooperation Act”. The Act is yet to be passed. This visit cements a stronger India-US defence relationship. In turn, Trump demands reciprocal commitments from Modi on America’s defence interests vis-à-vis China, which has its fallouts of nudging China, whose economy is five times India’s.

Unlocking the Potential of Civil Nuclear Partnership

Even though India and the US signed a historic civil nuclear deal back in 2008, there has been limited collaboration in this field. Some obstacles, like US concerns under India’s Civil Nuclear Liability Law and US’ restrictions on Indian nuclear entities, have impacted outcomes. Yet the recent move to take the Bhabha Atomic Research Centre (BARC) and other Indian groups off the US Entities List shows a fresh start in their relationship. The US will seek to amend liability laws to pave the way for American companies to participate in India’s nuclear energy expansion.

Immigration and Deportation: A Potential Sticking Point

Apart from discussions on trade and investment, immigration issues also hold importance. Recently, the crude manner of deportation of more than 100 Indian citizens from the US, with shackles in a military aircraft, has infuriated India. India needs to suggest a more formalised and respectful deportation procedure. Correspondingly, India must urge the US to keep open opportunities for skilled Indian professionals and students through the H-1B visa scheme, which has been advantageous to numerous Indian IT specialists.

A Pragmatic Approach to Bilateral Relations

Modi’s visit to the US is of strategic importance for the US-India relationship and a shared vision of geopolitics. Trump 2.0’s firm position on trade and deportation certainly poses challenges, but both countries understand the strategic linkages of this relationship. Modi hopes to find a way through Trump’s often unpredictable approach by offering carefully considered concessions in areas like trade, defence, and energy, all while setting the stage for India’s long-term benefit.

The author is former Director General, Mechanised Forces. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.