India's path through Trump 2.0

 India’s Path Through Trump 2.0

As Donald Trump is ready for his second term as U. S President, India finds itself at a crossroads. The first term brought a mix of strategic gains and diplomatic challenges, and “Trump 2.0” promises to be no less eventful. For India, this potential presidency offers opportunities to strengthen alliances and boost growth, but also demands careful navigation of protectionist policies and geopolitical uncertainties.  

Opportunities: A Stronger Bond

When Trump took office, U.S.-India relations took a strategic turn. Defense cooperation flourished under his administration, marked by agreements like BECA (Basic Exchange and Cooperation Agreement) in 2020 and India’s designation as a “Major Defense Partner.” These milestones were not just paperwork—they symbolized a growing partnership. By 2020, defense trade between the two nations had surged to $21 billion from negligible levels in 2008.  

Trump’s tenure also saw bilateral trade rise from $126 billion in 2017 to $146 billion in 2019. The U.S. became India’s largest trading partner, with Indian exports reaching $78 billion by 2022. If Trump returns to office, this trade relationship could expand further, especially in high-potential sectors like renewable energy and manufacturing.  

The alignment on countering China offers another strategic opportunity. Under Trump, the Quad—a coalition of India, the U.S., Japan, and Australia—gained momentum, with over $3 billion committed to regional projects in the Indo-Pacific. This cooperation holds the promise of bolstering India’s position as a key player in a strategically vital region.  

Energy and technology were also bright spots. India’s imports of U.S. crude oil and LNG jumped to $6.7 billion in 2021, compared to $2.5 billion in 2017. Meanwhile, collaborations in space, such as the upcoming NASA-ISRO NISAR satellite, and a $13.6 billion surge in U.S. tech-sector investments in 2022 highlighted the growing synergy in cutting-edge fields like AI and cybersecurity.  

Challenges: A Test of Resilience

But alongside the opportunities came challenges, many of which could intensify under a Trump 2.0 presidency. His “America First” policies often meant trade tensions, with tariffs on $6 billion worth of Indian goods hitting industries like steel and aluminum. Indian IT companies, which dominate global outsourcing markets, bore the brunt of restrictive H-1B visa policies.  

Trump’s unpredictable style added to the complexities. While India benefited from closer defense ties, sudden decisions—like his withdrawal from the Paris Agreement—created uncertainty in collaborations on climate and beyond.  

Over-reliance on U.S. defense imports posed another dilemma. Between 2017 and 2021, the U.S. accounted for 11% of India’s arms imports. While modernization is crucial, it risks clashing with India’s “Aatmanirbhar Bharat” vision for self-reliance.  

Geopolitical risks added to the equation. U.S. sanctions on Iran forced India to cut crude oil imports from 11% in 2018 to zero by 2021, delaying critical projects like the Chabahar Port. The U.S. withdrawal from Afghanistan further strained India’s regional security environment, with cross-border terrorism incidents rising by 14% in 2021.  

Even immigration policies under Trump cast a shadow. Strict rules on H-1B visas impacted over 200,000 Indian professionals annually, affecting remittances—$87 billion in 2021—and India’s IT sector. On top of this, U.S. scrutiny of India’s domestic policies, such as the Citizenship Amendment Act (CAA), risked straining bilateral relations.  

India’s Playbook: Turning Challenges into Opportunities

To thrive under a Trump 2.0 presidency, India will need a balanced and proactive approach. High-level dialogues can address trade and visa concerns while leveraging the influence of the Indian diaspora, which numbered 2.7 million in 2020.  

Diversification will be key. While strengthening U.S. ties, India must deepen its relationships with the European Union, Japan, and Russia to ensure strategic autonomy. Similarly, regional alliances within the Quad and ASEAN can counterbalance China and solidify India’s position in the Indo-Pacific.  

Economic reforms at home will also play a pivotal role. By improving market access for American firms and focusing on ease of doing business—India ranked 63rd globally in 2020—India can attract more investments and reduce trade friction.  

Lastly, energy and technology collaborations offer a path forward. Expanding renewable energy projects, securing LNG deals, and fostering partnerships in AI and quantum computing can drive India’s growth while strengthening U.S. ties.  

The Road Ahead

Trump 2.0 offers India both a chance to strengthen its global standing and the need to navigate potential storms. By adopting a pragmatic approach and carefully balancing partnerships, India can turn challenges into stepping stones, ensuring that its relationship with the U.S. continues to flourish in an increasingly complex world.