When Narendra Modi walks into the White House this week, he will do so as the prime minister of the world’s fifth-largest economy. By the end of President Donald Trump’s second term, it may be the third. America is betting on India’s inexorable rise. In Mr Trump’s first term, “Howdy Modi” and “Namaste Trump” mass rallies, headlined by the two men, became a visual shorthand for a relationship which many in India hope will deepen.
But the president that Mr Modi meets now is different: more than ever he is unconstrained by norms. Trump 2.0 is as likely to coerce partners as co-operate with them. As a result there are more potential points of friction than India’s diplomats might like. Trade remains a flash point. And a triumphalist America-first agenda could lead to new flare-ups over migration, defence and technology.
The relationship rests on a bipartisan article of faith: both need each other to hedge against China. A deadly border skirmish between China and India in 2020 pushed Delhi further into Uncle Sam’s arms. Total trade has doubled in the past decade, to about $200bn in 2024. American firms employ 1.7m people in India. America’s economy benefits from a 5m-strong Indian-American diaspora, of whom 80% have university degrees. Indian-origin bosses lead Alphabet and Microsoft.
Mr Trump’s election victory has been welcomed by Indians, 84% of whom believe that he will be good for India, the highest share among 24 countries surveyed in November 2024 by the European Council on Foreign Relations, a think-tank. As well as geopolitical and economic ties, he brings other benefits. Mr Trump may temper American criticism of India’s oil purchases from Russia. He is uninterested in imparting the lessons on human rights that have long exasperated India’s elites. And on February 10th Mr Trump signed an executive order suspending the enforcement of the Foreign Corrupt Practices Act, which American authorities used to launch a probe against Gautam Adani, a billionaire ally of Mr Modi. Mr Adani faces charges in American courts. (He denies wrongdoing.)
Yet America’s hyper-assertive nationalism and desire to draw economic activity within its borders could create stresses with India, which views itself as a wholly independent actor rather than a partially subordinate ally, and is keen to build up its own manufacturing base.
One problem is trade. In his first term, Mr Trump cancelled India’s preferential-trading-partner status, which grants lower or zero tariffs. He also curbed India’s Iranian oil imports through sanctions and raised tariffs on Indian steel and aluminium. Since then, America’s trade deficit with India has almost doubled, from $24bn in 2020 to $46bn in 2024. In order to pre-empt any spat over trade, Mr Modi is already making concessions. India’s budget on February 1st lowered tariffs on an eclectic list of items. Indian importers of LNG have been negotiating larger purchases from American suppliers, too.
Tensions over undocumented migrants in America also loom. At around 725,000 people, Indians were the third-largest group in 2022, according to Pew Research Centre, a think-tank. As with trade, Mr Modi has vowed to co-operate. In the first week of February 104 such individuals were marshalled in handcuffs into an American military aircraft bound for Punjab. But the issue will continue to rumble. Political friction over undocumented migrants could sabotage legal flows of people, particularly those from India’s tech-services industry. Some 72% of the foreigners awarded an H-1B skilled-worker visa in the year 2022 to 2023 were Indian. Within Maga circles these visas are intensely disliked, although other Trump-confidants, including Elon Musk, have defended them.
The third issue is defence. Joe Biden pursued containment of China in a predictable way. A deal in December 2024 authorised a $1.2bn sale of MH-60R helicopters and related equipment to India. The Biden administration also played to India’s desire to build its defence industry by approving the co-production of General Electric’s F414 jet engines, encouraging American defence firms to manufacture in India, and giving India access to military technology. One goal was to help wean India off Russian military equipment, which accounts for 36% of defence imports.
Mr Trump is far less likely to help India’s manufacturing push and has already urged Mr Modi to buy more American equipment. And he may lose patience with India’s “multi-alignment”, or doctrine of engaging with multiple partners while formally allying with none. He could push India to beef up its security partnership with America, Japan and Australia. At the other extreme, his penchant for surprise deals could produce a great-power detente between America and China over Taiwan, which could sideline India.
The final issue is tech. India is aligned with America in many respects: it has pushed to remove gear made by Huawei, a Chinese telecoms giant, from Indian networks, for example, and has attracted big investments from Amazon, Apple and other Silicon Valley giants. But India’s ultimate ambition is to become a major tech player in its own right. Mr Modi’s government wants to fund the creation of an Indian large language model and is subsidising semiconductor plants. It has pushed programmes such as Aadhaar, a home-grown digital-identification system, hard.
Mr Trump’s techno-nationalism could cut against such ambitions. On February 11th J.D. Vance, the vice-president, told an audience in Paris that “The Trump administration will ensure that the most powerful AI systems are built in the US, with American-designed and -manufactured chips.” India’s best hope is to argue that its home-grown tech offerings augment American power. Its cheap payment and identification systems could offer alternatives to Chinese models to countries elsewhere in the global south—without competing with upscale American ones.
For years American analysts have wondered what their country gains from working with a sometimes prickly India, asking if the “India bet” will pay off. The second Trump term may lead more Indians to ask the same question about America. ■
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