Economic Frictions, Strategic Convergence: US–India Relations Today

Commentary

By Vincent Sauve

If tariffs and new ties with Pakistan were not enough, India has also discovered that the war in Ukraine was “Modi’s war,” according to Peter Navarro, one of Donald Trump’s top advisers. Is this series of tariffs, unexpected rapprochements, and unfortunate allegations the result of an intensification of the U.S. grand strategy to contain China, or merely a succession of tactical moves characteristic of Trump’s administration? Washington’s attitude, trying hard to keep its position as the world’s leader by pressuring its partners and allies, is concerning. Nowadays, establishing sustainable relations with the U.S. is becoming a conundrum for any country: submitting or doubling down are the only two answers when diplomacy is off and the rule of power is on. If Russia and China are the two uncontested competitors of the U.S., the harshness of their relations hasn’t been the case for India. But, as time went on, India, which ranked as the world’s ninth power in 2010, is now becoming the fourth in 2025, also overtaking Japan as Asia’s second-largest economy this year. Its leadership is surging on the world’s scene, and its impact on various sectors is growing. However, instead of building long-term relations on mutual interests and trust, and considering India as an indirect ally in the trade war against China, Washington is using a short-term vision by deteriorating its diplomatic ties with India to the benefit of Pakistan, with which it has been getting closer over the past six months. In such a context, the remaining question is how India will respond to this pressure and diplomatic threats and further develop its relationships with Washington.

The additional 25% tariffs, combined with the previous 25%, raising the total to 50%, have been imposed on India due to its crude oil trade activities with Russia. Washington has even sought to strengthen these sanctions by urging the already-sanctioned Europeans to align with its policy. Since then, the implementation of tariffs in Europe, coupled with pressure through NATO, has deepened widespread distrust of Washington and raised questions about the possible sustainability of any further strategic agreement with the U.S.

As India is far less dependent on U.S. imports than European countries are, this situation significantly weakens its future relations with Washington. In fact, India and the USA are not formal allies but rather diplomatic and economic partners. In the strategic realm, the United States shares intelligence, technologies, and logistics with India. Additionally, in 2024, bilateral goods trade reached $41.5 billion for the U.S. and $87.5 billion for India, resulting in a goods trade deficit of $45,8 billion for the US. The use of tariffs highlights how urgent the global trade deficit is for Washington and how much the current administration fears its economic decline against emerging powers. As a trade balance appears unattainable, does India have any other option besides distancing itself from the U.S.?

A realistic answer from an Indian perspective would be to maintain its non-partisan policy, which has contributed to its success on the world stage over the past decade. India has always been cautious about joining any type of alliance from different blocs and has instead adopted a strategy of multi-alignment, engaging with all the world’s powers such as Russia, China, and the U.S., as well as various actors across Central Asia, the Caucasus, and the Middle East. Responding to external pressure from Washington by either accepting it or forming another alliance would be inconsistent with India’s principle of strategic autonomy. Furthermore, India is asserting itself as a global leader. Although economic development remains vital, the country became the second-largest Asian economy this year, surpassing Japan, with a GDP of $4,2 trillion and an annual growth rate of 7%. It is also on track to overtake Germany in the coming years, which would position it as the third-largest economy globally and reinforce its role as the second most powerful nation in Asia after China.

The spread of an already endemic anti-Western discourse, in the long run, is likely to be one of the main consequences of the U.S. tariffs and pressures, against which European countries should avoid reinforcing by following a similar path: doing so, exposes them to the risk of future countermeasures, without possessing the leverage or political or economic strength of the U.S.

Recently, at the annual SCO summit, which was being held in Tianjin, in China, Narendra Modi met Xi Jinping and both declared to be ready to expand their trade relations and present a united front against Western sanctions…

This sequence of events has highlighted India’s growing leadership on the world’s stage. New Delhi stands now at the crossroads: to leave its mark at another level on the world’s order or to remain silent. If times are changing quicker than the mentalities, India can prove it.

Disclaimer: This paper is the author's individual scholastic contribution and does not necessarily reflect the organization's viewpoint.

Vincent Sauve is a post graduated master student from Paris Nanterre University. He focuses on geopolitics and defense throughout Eurasia and is specialized on Russia, Caucasus and Central Asia. He also worked on the involvement of India in each of its regions.