The changing dynamics between the United States and India have a major impact on the way the world is organized in the twenty-first century. To fully realize the potential of this partnership, both governments need to focus on strategic multilateral relations, economics, and defense. The current situation favors the long-term growth of US-India relations. I am hopeful that India is ready to accept the challenges as well as the opportunities.
U.S. President Donald J. Trump Jr. welcomed Indian Prime Minister Shri Narendra Modi to Washington, DC, for an official working visit on February 13, 2025. President Trump and Prime Minister Modi reaffirmed the strength of the India-US partnership as leaders of independent and dynamic democracies that respect freedom, human rights, the rule of law, and pluralism. Mutual trust, shared interests, goodwill, and active civic participation serve as the foundation of this comprehensive global strategic partnership. President Trump and Prime Minister Modi introduced a brand new program called the “U.S. India Compact,” which stands for “Catalyzing Opportunities for Military Partnership, Accelerating Commerce, and Technology,” which aims to revolutionize several critical areas of cooperation in the twenty-first century. The strategic and economic environment is constantly being reshaped by international alliances. In many areas, India’s growing innovation and America’s technological superiority complement each other. Bilateral trade topped $118 billion, with India benefiting from a surplus of $45 billion. Through progressive economic ties, this partnership reshapes international cooperation, improves security, and promotes mutual growth. Trade, defense, and technology have all grown between the United States and India.
Important agreements such as the Communications Compatibility and Security Agreement and the Basic Exchange and Cooperation Agreement, which guarantee close cooperation in technology transfer and defense logistics, have been signed by the US and India. The 2020 Basic Exchange and Cooperation Agreement improved situational awareness in the Indian Ocean region by providing India access to US geospatial intelligence for targeted military operations. Initiatives such as the Initiative on Critical and Emerging Technologies have strengthened cooperation in critical technologies such as semiconductors, artificial intelligence, and quantum computing. India and Micron Technology worked together to build a $2.75 billion semiconductor plant that will enhance supply chain resilience. As a significant importer of US hydrocarbons, India seeks to help switch to green energy sources. In terms of oil imports, the United States ranked fifth with $413.61 million in 2024. Resilient supply chains, especially for essential commodities, are a goal of both countries’ efforts to reduce their dependence on China. India and the United States are part of the Quad nations. The main obstacle in trade talks between the US and India is the tariff dispute. India’s imposition of high tariffs on US goods, especially in the agricultural and tech sectors, affects the trade balance and often disrupts talks.
The 150 percent tariff imposed by India on alcoholic beverages has drawn criticism from the US for restricting US exporters’ access to markets. The generic drug industry in India favors a more balanced strategy to guarantee accessible medicine, while the US wants stronger intellectual property protection. The US Trade Representative placed India on its “priority watch list” due to concerns about intellectual property protection. India’s divergent positions on e-commerce regulations and proposed data localization laws are contrary to US interests. Concerns were raised by US corporations such as Google and Amazon about how India’s Personal Data Protection Bill would restrict cross-border data flows. The $45 billion trade deficit between the US and India prompted US pressure to increase market access and reduce tariffs. The United States sought to reduce the trade imbalance by requesting lower tariffs on medical devices such as knee implants and stents. India’s phytosanitary regulations that restrict US agricultural products hinder the expansion of bilateral trade in the sector. As trade talks have not resolved the issue of animal feed containing blood meal, India has restricted US dairy imports.
Cooperation in the LNG and renewable energy sectors is made possible by the US’s position as a major producer and India’s growing energy needs. For example, such partnerships will help India reach its goal of increasing the proportion of natural gas in the energy mix from the current 6 percent to 15 percent of the total primary energy mix. Co-production of defense hardware on beneficial terms can reduce India’s dependence on other countries while strengthening strategic ties. Hindustan Aeronautics Limited and General Electric signed a Memorandum of Understanding for joint manufacturing of fighter jet engines in India. Closer ties in critical technologies such as artificial intelligence, quantum computing, and space exploration provide opportunities for collaborative innovation. India was accepted as a partner in the Artemis Accords for cooperative space exploration and lunar missions. India’s efforts to increase domestic production complement the US “China+1” policy, which promotes shared objectives in strong supply chains. By increasing production in India through the production-linked incentive scheme, Apple and Samsung reduced their dependence on Chinese factories. An agreement that is more comprehensive could be facilitated by a limited trade agreement that focuses on improving market access and settling tariff disputes.
India and the US agreed to reduce tariffs on several industrial and agricultural products, indicating the possibility of a comprehensive agreement. A strong India-US alliance can be the foundation of global stability by resolving trade imbalances.
