Interview/ Richard Rossow, senior adviser, Washington-based Center for Strategic and International Studies
The US sent a relatively modest delegation to the AI Impact Summit in Delhi, but corporate America was highly visible through prominent displays and CEO-level participation. Coming to India in the backdrop of the US supreme court’s scrutiny of tariffs and its impact on the India-US trade framework, Richard Rossow, senior adviser at the Washington-based Center for Strategic and International Studies, says the road ahead can be bumpy as structural anxiety remains. Excerpts from an interview:
Q/ How significant is the US supreme court’s scrutiny of tariffs for India?
For US-India trade, the direct impact may be limited. Tariffs were initially deployed as leverage, but India had already moved towards a more pro-trade posture in recent years, signing agreements with multiple partners. Despite headline tariffs of 50 per cent, US-India goods trade rose by roughly 16 per cent over the past year before tapering slightly. There were several carve-outs that softened the blow.
The larger concern is uncertainty. If tariffs are imposed, struck down and then reintroduced under different legal authorities, businesses struggle to plan. That unpredictability may deter long-term investment more than the tariffs.
Q/ India’s chief negotiator was to visit Washington to finalise the trade framework. How do you view the delay, and what are the sticking points?
We are all waiting for clarity on what exactly will be included in the agreement. Important questions remain: what kind of market access will the US get in agriculture? What commitments will India make to purchase more American goods? Beyond broad announcements, the legal text and details will matter. If we can get the agreement across the finish line, it could unlock the next significant wave of American trade and investment in India.
Agriculture remains politically and socially sensitive in India. On staple grains and products tied to the minimum support price system, it is difficult to imagine major concessions. American agriculture is highly efficient and globally competitive, supported by advanced supply chains. Indian smallholder farmers, often operating with limited infrastructure and few alternative employment options, cannot compete on equal terms. That makes deep liberalisation unlikely.
Q/ You’ve argued that President Trump’s political appeal is rooted in structural economic anxiety. Do you expect a more inward-looking US trade policy to persist beyond his presidency?
Yes. President Trump’s appeal is grounded in communities that feel left behind by globalisation, industrial restructuring, trade agreements and immigration. I grew up in Michigan, once the heart of the American auto industry. Many of the manufacturing jobs that sustained entire towns no longer exist. When people believe economic change has directly harmed their livelihoods, they look for clear explanations. If trade and immigration are the only explanations consistently articulated, they will rally behind that message. It may not represent a majority of Americans, but in two of the past three elections it has been enough to bring someone to power. Because that structural anxiety remains, a more inward-looking trade approach is likely to persist as a feature of US politics, even beyond Trump.
Q/ Beyond goods trade, what emerging areas could define US-India ties under Trump 2.0?
Hydrocarbons are likely to feature prominently. The US runs roughly a two-to-one goods trade deficit with India. Expanding US exports of oil and gas could help rebalance trade flows. Defence cooperation will remain central and enjoys bipartisan support in Washington. Another potential area is encouraging greater Indian investment in the US, particularly in regions that have experienced deindustrialisation. Expanding the footprint of Indian firms in those communities could align with US domestic priorities.
Q/ How does AI intersect with the trade relationship?
AI will intersect with trade, but not primarily through traditional goods trade, which is the focus of the current agreement. There is some overlap in areas such as data centres. India has signalled its ambition to become a major data centre hub, supported by tax incentives in the recent Union budget. Several US-based multinationals have already begun investing in data infrastructure.
However, much of the AI partnership will sit outside the formal trade deal. Export controls are an important factor. Towards the end of the [Joe] Biden administration, tighter restrictions were placed on advanced AI compute chips, and India was not included on the most trusted-access list alongside NATO allies. If strategic trust deepens, India could see fewer restrictions in the future.
Q/ India has emphasised “sovereign AI.” How realistic is it, and how does it align with US interests in open data flows?
True sovereignty in AI hardware is extremely challenging. India does not currently produce advanced AI chips and is unlikely to compete at the cutting edge of foundational models. Sovereignty is crucial in national security applications such as intelligence analysis and signal processing, where reliance on foreign platforms poses risks. But beyond those areas, the AI ecosystem is deeply interconnected. Access to advanced semiconductor chips depends heavily on the US and Taiwan, and the most advanced large language models are largely developed by American companies.
If India wants access to the most powerful systems, partnership will be necessary. At the same time, India’s recent policy measures—including long-term tax incentives for data centres serving global markets—signal that it wants to remain open and integrated into global data flows, even while preserving sovereignty in sensitive domains.
Q/ Could AI become a strategic export for India, particularly to the Global South?
Yes. It could become one of India’s most significant diplomatic and economic tools. India does not export large volumes of high-end defence equipment, and its development assistance budget is modest. But affordable, scalable AI tools that enhance governance and public service delivery could be deployed across Africa, Latin America and Southeast Asia. India’s multilingual experience provides an advantage in building adaptable AI systems. If executed effectively, AI could position India as a development partner of choice for the Global South.