Can the US-India relationship be saved?

Mint

12 hours ago

The U.S.-India relationship is in trouble due to President Trump's punishing tariffs and public wooing of India's arch-enemy, Pakistan. Even so, it's too early to write an obituary for one of America's most significant partnerships in Asia. If both sides can muster creativity and flexibility, they can prevent a long-term rupture.
First the bad news. For the first time in more than a quarter-century, the U.S. appears to be questioning a cornerstone of its Indo-Pacific policy—that maintaining a strong relationship with India is in America's interest. This month the U.S. imposed a 25% tariff on Indian goods and added another 25% as punishment for India's purchase of discounted Russian crude oil following Vladimir Putin's 2022 invasion of Ukraine. The combined 50% tariff is among the highest imposed by the U.S. on any country.
On social media, Mr. Trump has castigated India for erecting 'strenuous and obnoxious" trade barriers, for not caring 'how many people in Ukraine are being killed," and for having a 'dead" economy.
Mr. Trump has also repeatedly said he brokered a cease-fire in a four-day conflict between India and Pakistan in May, a claim India denies. He has hosted Pakistan's de facto military ruler, Field Marshal Asim Munir, at the White House, applied a comparatively modest tariff rate of 19% on Pakistan, and talked up the prospect of helping develop Pakistan's oil reserves—an odd idea considering there's little evidence Pakistan has much oil. The Pakistani government has nominated Mr. Trump for the Nobel Peace Prize.
India's official response has been muted. A Foreign Ministry statement justified India's purchase of Russian oil, saying imports are 'meant to ensure predictable and affordable energy costs" for Indian consumers. It pointed out that neither the European Union nor the U.S. has ended trade with Russia, and it described America's 'targeting of India" as 'unjustified and unreasonable."
Pundits who follow the U.S.-India relationship agree that it is in deep trouble. Evan Feigenbaum of the Carnegie Endowment for International Peace argued that 'President Donald Trump is now in the process of dismantling this painstakingly built relationship," undoing decades of bipartisan effort.
'Donald Trump was supposed to be good for India in his second presidency," Shyam Saran, a former Indian foreign secretary, wrote in the Indian Express. 'He has turned out to be nightmare."
These concerns aren't overblown. The base 25% tariff on India took effect last week, and the additional 25% tariff is due to kick in on Aug. 27. The U.S. accounts for roughly one-fifth of India's goods exports. Labor-intensive sectors such as textiles, garments, jewelry and auto parts would be particularly hard-hit by a 50% tariff. It also threatens the viability of Prime Minister Narendra Modi's flagship Make in India program, which is aimed at boosting the country's manufacturing output.
A strained relationship also hurts Washington. India was the 10th-largest U.S. trading partner in goods and eighth-largest in services in 2024. The greater potential downside of a weakened U.S.-India relationship is geopolitical. India boasts the largest population of any country and is on track to become the world's third-largest economy at market exchange rates by 2028. A recent report by the Center for a New American Security, a Washington think tank, listed India among six so-called global swing states, allied neither with the U.S. nor China, that 'together will exert disproportionate influence over the future of international order."
The geopolitical logic that brought the U.S. and India closer in the first place means a patch-up remains possible. Rupture would imply that under Mr. Trump, the U.S. is no longer interested in taking seriously its competition with China. For India, the choice is a no-brainer. China claims large chunks of Indian territory and is Pakistan's closest military and diplomatic ally.
Both the U.S. and India have left the door open to compromise. Despite his harsh words, Mr. Trump has continued to call India 'a friend" and has refrained from lashing out at Mr. Modi. Nor has the Indian prime minister attacked the U.S. or Mr. Trump.
Unlike most countries, India has the means to offer Mr. Trump a deal that he can sell as a big win. India is the world's second-largest arms importer, after Ukraine, and the third-largest oil importer, after the U.S. and China. Growing domestic demand for energy gives India room to increase its liquefied natural gas imports from the U.S. According to the Confederation of Indian Industry, Indian businesses have invested $40 billion in the U.S. They could promise to invest more.
Even on agriculture—a major sticking point in negotiations—India could probably eliminate tariffs on select items, such as soybeans and blueberries, without risking too much political backlash. As long as the U.S. doesn't actively arm Pakistan, India can probably live with Mr. Trump's empty praise for Islamabad. India's ties with Moscow and outreach to Kyiv could prove helpful in U.S. efforts to broker a peace deal.
If India brings a sweeter offer to the table, Mr. Trump could give Mr. Modi a political win by dropping tariffs to the 15% rate that Japan and South Korea enjoy. If this happens, people will view the president as a builder of deeper U.S.-India ties rather than as the wielder of a wrecking ball.