Trump 2.0: Challenges and Opportunities in US-India Relations and Diplomacy

The past four years under the Biden Administration have seen a mixed trajectory in US-India diplomatic and trade relations. While significant strides were made in some areas, lingering challenges have hindered the full realization of the potential of this crucial partnership. As President Trump prepares for a return to the White House, a strategic recalibration with a new ambassador to India could address these challenges and unlock unprecedented opportunities for both nations. With India poised to become the 3rd largest economy by 2030, the US should actively strengthen its bilateral relationship with India to capitalize on this growing economic power and access a large market with significant potential for trade and investment opportunities.

Key Challenges in US-India Relations (2021-2024)

1. Trade Imbalances and Protectionism

Despite robust bilateral trade, disputes over tariffs, market access, and intellectual property rights have persisted. The United States reinstated some tariffs on Indian steel and aluminum, while India imposed retaliatory tariffs on American agricultural products. Both nations have also shown tendencies toward protectionism, complicating negotiations for a free trade agreement (FTA).

2. Tech and Data Governance Disputes

The rise of digital economies has brought disagreements over data localization, privacy laws, and regulatory frameworks. India’s data localization policies and its emphasis on self-reliance in technology (Atmanirbhar Bharat) have caused friction with US tech giants and policymakers.

3. Human Rights and Democratic Values

Concerns over India’s handling of religious and political freedoms, especially in Kashmir and minority rights, have occasionally strained relations. The Biden Administration’s emphasis on human rights has led to criticisms, which India has interpreted as external interference.

4. Defense Procurement and Strategic Autonomy

While defense ties have deepened, India's continued reliance on Russian military hardware has raised questions in Washington about New Delhi’s commitment to diversifying its defense partnerships. The ongoing Ukraine war has further complicated this dynamic.

5. Climate and Energy Policy Divergences

India's push for coal-based energy to meet growing demands has clashed with the US's climate goals. Disagreements over financing clean energy projects and achieving net-zero emissions have hampered collaborative efforts.

Recommendations for President Trump’s Administration

To overcome these challenges and capitalize on shared interests, a renewed approach that balances pragmatism with mutual respect is essential. Here are key recommendations:

1. Appoint an Ambassador with Deep Cultural Understanding of India, Bilateral Trade and Technology

A new US ambassador to India must be well-versed in trade, technology, and defense cooperation while demonstrating sensitivity to India’s domestic concerns and respect for its 5000 years old culture. This individual should prioritize personal diplomacy with Indian leadership and cultivate ties with business, technology, and civil society leaders. Having worked deeply across US-India trade and technology space, for past 3 decades as well as defense/ security partnership through Quad, I cannot emphasize more the critical importance of all these factors as well the cultural sensitivities of India to make a win-win deal in critical sectors where both countries have struggled for decades.

2. Strengthen the Quad and Indo-Pacific Partnerships

Building on the Quad framework, the US should continue working with India, Japan, and Australia to counterbalance China’s influence in the Indo-Pacific. Expanding joint naval exercises, intelligence-sharing, and supply chain security will bolster mutual trust and regional stability. Quad Investors Network (QUIN) established 18 months back as public-private partnership for Quad nations cross-border technology and trade expansion should be enhanced to leverage the best of US and India's strength by the new ambassador. As the founding chairman of QUIN, my team and i have worked very hard since the founding to get this off the ground and now is the real momentum to scale it.

3. Expand iCET, DTTI, and Indus-X Initiatives

• iCET (Initiative on Critical and Emerging Technologies): Scale up collaboration in semiconductors, AI, and quantum computing. Offer joint R&D grants and set up technology transfer agreements to align standards and policies.
• DTTI (Defense Technology and Trade Initiative): Finalize more co-production and co-development projects for advanced military systems, such as drones and hypersonic missiles.
• Indus-X: Promote private-sector partnerships in space exploration, green technology, and biotech industries. Initiatives like satellite-sharing programs and green hydrogen production can unlock synergies.

4. Address Trade Disputes through a Bilateral Trade Pact

Propose a limited trade agreement focused on reducing tariffs on key goods such as agricultural products, pharmaceuticals, and technology equipment. Simultaneously, develop mechanisms to resolve disputes over intellectual property and digital trade.

5. Balance Values with Realpolitik

Adopt a constructive and pragmatic approach to human rights concerns. Public criticisms should give way to private diplomacy, emphasizing shared democratic values without alienating New Delhi.

6. Partner on Clean Energy and Climate Finance

Collaborate on renewable energy projects, particularly solar, wind, and hydrogen. The US should facilitate low-cost financing and technology sharing to help India achieve its energy transition goals.

Building on Common Values and Interests

The US-India relationship is anchored in shared democratic values, a commitment to the rule of law, and a vision of a free and open Indo-Pacific. Expanding on these commonalities, a Trump-led administration could:

• Promote Cultural Diplomacy: Expand educational exchanges, such as the Fulbright-Nehru program, to foster people-to-people ties.
• Boost Connectivity: Work with India on modernizing infrastructure through collaborations with US-based companies, particularly in rail, port, and energy sectors.
• Champion Healthcare Cooperation: Strengthen pharmaceutical partnerships, focusing on vaccine production and distribution.

The US-India partnership holds immense potential to shape the 21st century. By addressing trade imbalances, leveraging defense and technology frameworks, and respecting each other’s sovereignty and values, the two nations can build a durable and transformative alliance. President Trump’s administration has an opportunity to reinforce trust, deepen collaboration, and create a roadmap for unprecedented growth and prosperity for both countries.