Follow-through will be Trump’s test for India
Not since the nuclear deal has there been as much pressure on the Indian system to walk the talk on the US relationship
Prime Minister (PM) Narendra Modi confronts problems directly. His visit to Washington DC, straight into the lion’s den, was proof of Modi’s willingness to do so. And it paid off. The visit went off without any embarrassing incident, a fact that can never be taken for granted when Donald Trump is around. Trump was more personally effusive about Modi than he is about foreign leaders. And the joint statement laid out a truly ambitious blueprint to deepen defence, economic and technology ties.
But pleasing Trump involved making serious commitments that will test Indian economic policymakers, the defence establishment, and the political leadership in the next six months. Trump is likely to make his visit to Delhi and appearance at Quad contingent on the deliverables on the bilateral stage.
The first test for the economic establishment involves working with Trump’s team to arrive at the first tranche of a bilateral trade agreement (BTA). Don’t assume this is just about reducing tariffs, which in itself will be a challenge given political sensitivities. And don’t assume that buying more energy by itself will make Trump happy. Trump’s order on reciprocal taxes factors in the entire menu of policies that can be seen as favouring domestic businesses over foreign businesses (subsidies, tax regimes, regulatory actions). The United States (US) has its eyes on India’s data rules, treatment of American e-commerce and tech companies, and any non-tariff barrier that can be remotely interpreted as distorting a “level playing field”.
This is not about whether Trump is right or wrong — the hypocrisy inherent in America turning protectionist and asking India to open up more is glaring. This is not about whether the external push may well result in helping the Indian economy — and indeed the economy does need a reboot and more openness to draw investment.
This is about being aware of the choice between Trumpian retribution that will inevitably hurt exports and investment, two essential engines at the time of an economic slowdown, and a fairly high degree of US-centric trade liberalisation and economic openness that will inevitably trigger resistance from strong domestic business lobbies and the bureaucracy.
Navigating this will require tough political calls. It will require the ministries of finance, commerce, and electronics and information technology, to work together very closely. And it will require ensuring that domestic regulatory authorities aren’t seen as tools of domestic national champions.
The second test is for the defence establishment, which has to show Trump real money within the coming year. But don’t assume this is just about a couple of systems here and there. Trump has walked into office expecting much greater Indian defence integration with the US. Again, this may be something that works for Indian security in itself, but it is useful to be aware of the expectations and the choices it entails.
Trump’s reference to “billions of dollars” of sales is serious. The fact that Trump cleared the Predator drones but India took seven years to buy the drones (under the next presidency) is something that his ecosystem remembers.
His team also knows how Trump forced India to speed up the acquisition of Apache attack helicopters and SeaHawk helicopters, by threatening to announce it in Ahmedabad unilaterally and making the success of his 2020 visit contingent on it. This time, Trump wants to sell more systems and quickly.
It is in this context that one has to understand the F-35 riddle. India doesn’t have the money for it and doesn’t quite want it. It shows the US’s willingness to go far on technology contingent on acquisitions, and this is good, especially if the US really reviews export control regulations. But Delhi is now in a curious position where it is privately hoping that the older American defence establishment actually blocks even talk of an F-35 sale. If Trump does open the doors for it, and this gets into his head, then the pressure on Delhi to acquire it will only increase in the next few years. And even if that’s not the path Delhi traverses, expect pressure to buy other systems, to work on other mechanisms of military coordination in other theatres, and to incorporate this deeper alignment in the 10-year framework that will be signed this year.
All of this eventually will test the political leadership. Modi has been honest about the US as a valued partner since 2014 itself. He knows deepening both economic and military ties is in India’s interest. He knows the Indian street like the US. And he has become better friends with the US in a masterful way that has allowed India to retain its autonomy. But India has been able to do this largely because the US was a polite transactional power under Barack Obama and Joe Biden, and Trump, in his first term, was finding his feet.
The US is no longer a polite transactional power, but a ruthless extractive power. When a veteran like the Singaporean defence minister Ng Eng Hen says that Washington now sees Asia much like a “landlord seeking rent”, India better know what it is dealing with. And nothing symbolises this more than the deportation flights. The fact that Indian diplomacy in DC failed to manage either the timing or nature of the flights speaks of how little influence it really has in Trump’s world.
This is just a microcosm of the real political challenge now at hand. India has wisely decided to deepen ties with the US. This will require India to do more than it has in the past. It has to do more at a time when the US isn’t necessarily going to be respectful of India’s political needs, or even as dependable, and is fighting with both its allies and much of the global south. All of this means that the political costs of aligning with the US will grow both domestically and externally.
The nuclear deal saw an Indian government stake its survival for the sake of its relationship with the US. The reward was clear: Entry into an elite strategic club. Not since then has the Indian system been put under the same pressure to walk the talk on the US. This time, the reward is the lack of punishment, and then, hopefully, continued capital inflows, trade ties, technology transfer and strategic insurance.
The views expressed are personal