There is an opportunity and challenge for India to engage with the United States under a renewed Trump administration as Donald Trump begins his second stint at the White House. Specifically, New Delhi is keen to consolidate business ties and look for trade, technology, and defence agreements early in Trump’s term. Although he has a messy record from his first term in office, India is hopeful that Trump 2.0 will benefit crucial partnerships despite strong potential impediments on the issues of tariffs, protectionism, and immigration.
A Renewed Push for Trade and Business Relations
This was one of the major priorities for the NDA government of India during Trump’s first term; it was quite a mixed bag of successes and setbacks. Soon, in Trump 2.0, New Delhi will reboot critical negotiations on FTA, which had gained momentum before stalling.
Trump’s emphasis on bilateral deals aligns well with India’s shift towards direct ties with major economies. A gradual shift of attention toward direct ties with powerful economies enables India to settle on more favourable terms for its emerging industries.
At the same time, it is a significant challenge for Trump, as he put tariffs on American manufacturing for his protectionist policy. Tariffs imposed by the U.S. on textiles, pharmaceuticals, and electronics sectors—where India had high export targets—could skyrocket because of Trump’s emphasis on national interests.
Indian leaders will have to search for innovative tariff reduction and exemption ways to determine the competitiveness of Indian goods in the U.S. market. Early understandings in these areas can support a solid underpinning for broader economic cooperation during the Trump administration.
The Role of Technology and Emerging Sectors
Technology is yet another area in which Indo-US cooperation can have potential. In the last two years, India has transitioned from being just a receiver of foreign technology to a leader in creating new technology. It has impressed in segments like semiconductors, digital infrastructure, and artificial intelligence, among others. In focusing on preserving U.S. manufacturing, the Trump administration will add complexity to attempts at convincing American investments in Indian high-tech sectors, including semiconductors. However, technology transfer agreements and joint ventures are critical to India’s ambition towards Atmanirbhar Bharat.
On the positive side, a foundation exists between the U.S. and India in areas such as the partnership in Critical and Emerging Technology (CET). Under Trump, such a partnership would expand joint research and technology sharing in strategic sectors. The Quad partnership between the U.S., India, Australia, and Japan also provides outstanding ground for regional technology and defence collaboration sharing as a focus on keeping China in check.
Defence Cooperation and Strategic Partnerships
Trump’s second term could see a continuation and growth in India-U.S. defence ties. Important acquisitions during Trump’s first term—orders for 22 AH-64E Apache helicopters, 24 MH-60 Seahawk helicopters, etc. reaffirmed the content of Indo-U.S. defence cooperation. In the early stages of Trump 2.0, New Delhi may look to seal more arms sales and search for new partnerships in defence, especially in the Indo-Pacific region. That is an area in which both countries share strong interests in holding stability.
However, defence manufacturing is cutting stress as India is now focusing on an inward-looking approach. India’s push for self-reliance in defence manufacturing may create friction. U.S. defence companies under President Donald Trump’s “America First” policy would naturally look to boost American job creation. This would conflict with India’s need for localised production and technology transfer. India will have to balance getting advanced U.S. defence technology with pursuing domestic production, which is the bedrock of its defence policy.
Challenges on the Immigration Front
India’s I.T. and services sectors are vulnerable to U.S. immigration policies, as a large share of the Indian skilled workforce depends on H1B and L1 visas for a job in the United States. Trump has been known to be tough on immigration, and his “America First” approach could even discourage work visas. This is a major challenge for Indian I.T. companies that have huge stakes in this U.S. market.
As the biggest IT market in the U.S. is India, the New Delhi government might have early consultations in order to retain provisions that would ensure talent mobility without interruption to the flow. Building a domestic job opportunity base in India’s tech sector may also be an idea for preventing visa restrictions from occurring, though this would be much longer-term.
Broader Geopolitical Considerations and the China Factor
One likely continuation of Trump’s approach toward China, contentious in nature, will align well with Indian concerns over Chinese aggression in the region. This alignment may also open avenues for deeper Indo-U.S. cooperation, Indo-Pacific-especially through the Quad partnership.
However, Trump’s potential pivot toward closer relations with Russia would complicate India’s strategic positioning. India has always balanced its relations with the U.S. and Russia, particularly on the defence side. A more cooperative US-Russia alliance could compel New Delhi to rebalance its foreign policy so as not to annoy either superpower.
Indian initiatives in the global supply chain of semiconductor companies could also be negatively affected if Trump’s policies emphasise domestic U.S. production more than internationalisation.
Conclusion
To navigate these opportunities and challenges in Trump’s second term, New Delhi will likely tread the pragmatic path. Early efforts in securing major business deals, especially in trade and technology, would form a strong partnership balancing economic and strategic interests. India could position itself as a reliable Indo-Pacific partner, fostering collaboration in defence, trade, and technology with the U.S.
