The evolving dynamics between the United States and India could face significant challenges if Donald Trump returns to office with his strong stance on the “America-First” policy. While Prime Minister Narendra Modi and Trump have publicly shared a friendly rapport, analysts predict that Trump’s trade policies and focus on American economic interests could strain US-India ties. This article examines the potential implications of Trump’s agenda on key areas of cooperation, trade, and diplomacy between the two nations.
The Threat of ‘Reciprocal’ Tariffs on India
One of Trump’s core campaign promises is to impose “reciprocal” tariffs on countries with trade surpluses with the United States, aiming to protect American industries. India, with a trade surplus exceeding $30 billion in the 2023-24 fiscal year, may be directly impacted by these measures. Trump has previously labeled India as a “tariff king” and criticized it as a “trade abuser,” suggesting that he may take a hardline stance on trade imbalances if reelected.
Economic and Industrial Impact on India
Indrani Bagchi, chief executive of the Ananta Aspen Centre in Delhi, notes that Trump’s focus on bringing economic activity back to the US could harm countries like India, which rely on trade surpluses with America. India’s “Make in India” initiative, which encourages local manufacturing through tax incentives and simplified regulations, has successfully attracted global companies like Apple seeking to diversify their supply chains outside China. However, if Trump initiates a “tariff war” as expected, key Indian industries—including tech giants like TCS and Infosys—could see a reduction in their American contracts and revenues.
In previous encounters, Modi and Trump have emphasized their friendship through high-profile joint appearances, including a 2019 rally in Houston and a 2020 gathering in Gujarat. Trump has even described Modi as a “friend” and “total killer” in recent media appearances. However, the two leaders’ personal rapport may not be enough to counterbalance the impacts of trade policies that prioritize American interests.
Implications for India’s Growing Economy
Ashok Malik of The Asia Group points out that Trump’s trade policies, though primarily targeting China, could inadvertently impact India as well. Indian industries dependent on US trade could feel the pinch as Trump doubles down on his pledge to bring jobs back to the US, challenging Modi’s efforts to foster foreign investment and economic growth.
Immigration Challenges: A Looming ‘PR Disaster’
As one of the largest sources of legal migration to the US, India has a vested interest in America’s immigration policies. However, recent years have also seen a rise in illegal Indian migration, with many entering the US through the Canadian and Mexican borders. Trump’s strict anti-immigration stance could spark diplomatic frictions if Indian nationals become a focus of deportation efforts. Indrani Bagchi warns that mass deportations of Indian migrants could be a “PR disaster” for both nations.
Strategic Alliances and the Future of US-India Cooperation
Under Modi’s leadership, India has sought closer ties with the US across various sectors, including defense, technology, and semiconductor production. India also plays a strategic role in the US-led Quad alliance, which includes Japan and Australia and is aimed at countering China’s influence in the Asia-Pacific region. However, experts suggest that Trump’s unpredictability and transactional approach could disrupt the trajectory of this cooperation.
Balancing the Quad Alliance
Professor Harsh V Pant of King’s College London raises concerns about Trump’s “unpredictability” and lack of a strategic worldview, which could hinder US-India relations within the Quad framework. As India navigates its complex relations with China, the reliability of US support remains essential, and a shift in Trump’s approach could create instability in the region.
While Modi and Trump have maintained a friendly public image, underlying challenges remain in their countries’ trade, immigration, and strategic policies. Trump’s “America-First” agenda and focus on trade protections for the US have the potential to test this friendship and strain US-India ties. For India, managing its relationship with the US under Trump’s leadership could involve balancing national interests with the complexities of a globalized economy and the pressures of American trade demands.
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