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India-US relations: Can it withstand Donald Trump's economic bluster?

India-US relations face a test following President Donald Trump's disparaging comments and new tariffs, which threaten strategic and economic cooperation

The recent comments from President Donald Trump, dismissing the Indian economy as “dead”, have understandably caused a stir. Coming on the heels of new tariffs on Indian goods, this rhetoric feels like a school-yard bully telling a smaller child, “your mother is ugly”. It is meant to provoke and belittle. And just like a child’s insult, we must recognise it for what it is: a tactic, not a true reflection of reality or a basis for sound policy.

For India, the key is to take Trump seriously, but not literally. We cannot afford to be distracted by his provocative language and “all-caps” social media posts. The challenge lies in separating the bluster from the underlying strategic and economic realities that continue to bind our two great nations.

Trump’s words may not be a sign that he has suddenly forgotten India’s significance. Rather, they are part of a political strategy, largely aimed at a domestic audience. His preferred negotiating method is to create an atmosphere of crisis to extract concessions. By labelling India’s tariffs as “among the highest in the world” and our economy as “dead”, he is setting the stage to present any future trade deal as a massive victory for the American people.

Prime Minister Narendra Modi with US President Donald Trump | PTI

The risk, however, is that the 50 per cent tariff announcement, and the accompanying surround-sound, might derail the strategic partnership between India and the US. Trump’s behaviour threatens crucial areas of cooperation that both countries have a vested interest in preserving and advancing.

First, there is geopolitical convergence. Both India and the US share a common vision for a free and open Indo-Pacific. This has led to robust cooperation through platforms like the Quad, where we work together to counter challenges to regional stability. Will the Quad survive Trump’s outburst? Will he even attend the summit planned later this year in India?

Our defence relationship has deepened significantly over the years, with the US becoming a major supplier of advanced military technology to India. This partnership is not just about transactions; it is about shared values and a common strategic interest in balancing power in the region. What happens to that now?

Third, what will happen to our economic ties? With these tariffs, the US can’t remain India’s largest trading partner, and our IT and service sectors, which rely heavily on the American market, are in jeopardy. The US, too, will lose benefits from India’s growing consumer base and skilled workforce. The goal of reaching a bilateral trade of $500 billion, announced in February, now looks like a bad joke. Will Trump’s tariffs bury the long-touted potential of this relationship?

True, there is a lot more to Indo-US cooperation than Trump. India and the US continue to deepen ties across AI, semiconductor innovation, defence co-production, maritime security and tech infrastructure. Despite tensions, shared concerns over China and complementary strengths in innovation might still sustain a robust, forward-looking strategic partnership. But Trump has shattered the trust and bonhomie that sustained the pairing.

Still, there are the profound people-to-people connections. The Indian diaspora in the US is a vibrant and influential community, serving as a powerful bridge between our two cultures. From Silicon Valley to the halls of academia, Indians have made immense contributions to American society. This human connection is a source of strength that transcends political cycles and rhetoric.

Yes, the tariffs are a setback, and India must respond to them with a clear and consistent focus on protecting its national interest. But we must not overreact to the school-yard insults and allow them to shape our long-term strategy. We must continue to engage with the US, both at the diplomatic and private sector levels, to mend the damage and pursue a comprehensive trade agreement. We must work to rebuild access to key decision-makers in the administration and repair the trust that may have been damaged.

The India-US relationship is a testament to the power of a comprehensive global partnership, and it is a relationship that has “weathered several transitions and challenges”, as an external affairs ministry spokesman rightly stated. We must not allow the current turbulence to erase the long-term trajectory. Trump’s words are meant to be heard loudly, but they are not the final word on the future of our partnership. Our collective action, if grounded in strategic foresight and mutual respect, will be.

editor@theweek.in