Transactional turn: On India and the new U.S. administration
As a new administration takes charge in the United States, India finds itself pivotal in its strategic, economic, and legal engagements with its long-standing partner. The India-U.S. relationship has evolved beyond conventional diplomacy into a multifaceted partnership encompassing trade, defense, technology, and legal cooperation. Prime Minister Narendra Modi’s recent visit to India-U.S. relations set the stage for a transactional approach to bilateral engagements under the new U.S. administration. Modi was the fourth world leader to hold bilateral discussions with Trump, following close U.S. allies such as Israel, Japan, and Jordan, signaling India’s growing stature in Washington’s foreign policy framework.
A major highlight of the visit was the emphasis on trade and commerce. The two nations launched ‘Mission 500,’ an ambitious initiative to achieve $500 billion in bilateral trade by 2030. This move addresses trade imbalances with the U.S.
President Trump announced increased Indian purchases of U.S. energy, oil, and defense equipment. This transactional approach to trade aligns with Trump’s economic policies, emphasizing direct benefits to American industries. While these agreements strengthen economic ties, India must navigate the implications of increasing its energy imports and defense procurement from the U.S., ensuring a balanced trade policy that safeguards its domestic industries.
In an effort to streamline military and technological cooperation, both nations agreed on a new umbrella framework, COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology for the 21st Century). Sectors such as defense technology, cybersecurity, and space exploration are being enhanced. Additionally, the Biden era Initiative on Critical and Emerging Technologies (iCET) was rebranded as Transforming the Relationship Utilizing Strategic Technology (TRUST), reflecting a renewed focus on semiconductors, quantum computing, and artificial intelligence. The strategic importance of these agreements cannot be understated, as they align with India’s push for self-reliance in technology while fostering partnerships in critical sectors. However, India must maintain a cautious approach to ensure that its strategic autonomy is not compromised in the process.
The trade relationship between India and the U.S. has seen both cooperation and contention. The revocation of India's Generalized System of Preferences (GSP) status in 2019 and subsequent negotiations over tariff reductions underscore the complexities of trade law in bilateral relations. Under the new U.S. administration, a reassessment of trade policies, including the possibility of reinstating trade concessions, remains crucial. Indian professionals, particularly those in the IT sector, form a significant portion of the U.S. workforce under the H-1B visa program. Changes in U.S. immigration laws, including restrictions on work permits and green card allocations, have resulted in legal battles affecting thousands of skilled Indian workers. The judiciary’s role in interpreting immigration policies, addressing visa denials, and ensuring fair treatment of Indian expatriates remains critical.
