It Is Time to Reset the US-India Relationship

India’s challenges are also America’s challenges. It is vital that these two countries find ways to bolster each other

By Anil Madan

At the beginning of this month, nineteen members of the House of Representatives, all Democrats with no Republican joining, sent a joint letter to President Trump urging him to reset and repair the “critical partnership” that the US has forged with India.

These Representatives seemed focused primarily on Trump’s announced hikes in tariffs as high as 50% on goods imported from India. These tariffs, they argue, hurt both the American consumer and American manufacturers dependent on the intricate supply chains that they depend on to bring products to market.

These members of Congress described their districts as “large, vibrant Indian American communities” that maintain strong familial, cultural and economic ties with India. They complained that Trump’s recent actions had strained relations with India, the world’s largest democracy with resultant negative consequences for both countries.

The signatories to the letter asked the President to review his announced tariff hikes and to abjure confrontation, urging dialogue and recalibration with India’s leaders.

The Representatives stressed that the US-India trading partnership is exceptionally important and that it supports hundreds of thousands of jobs in both countries.

The letter went on to say: “American manufacturers depend on India for key inputs in sectors from semiconductors to heath care, energy and more. American firms investing in India also gain access to one of the fastest-growing consumer markets in the world, while Indian companies have invested billions of dollars here in America, helping to create new jobs and opportunities in the communities we represent. This indiscriminate tariff escalation jeopardizes these ties, raising costs for American families, undermining the ability of American companies to compete globally, and undercutting ground-breaking innovation and cooperation.”

Finally, the Representatives warned that Trump’s hostile approach has “pushed the Indian government to increase its diplomatic and economic engagement” with Russia and China and that this may cause the US to lose India’s “indispensable role as a counterweight to China’s growing assertiveness.” Stressing this, they referenced India’s participation with the U.S., Australia, and Japan, in The Quad which seeks to rein in China’s aggressiveness in the Indo-Pacific region.

Frustration with the “so-called ally”

Back on July 31 this year, Secretary of State Marco Rubio appeared on Fox News. He echoed President Trump’s frustration with Putin who would have “nice” conversations with Trump, only to go on and kill more people overnight.

The Fox host referred to a post by Trump on his social media outlet, Truth Social, complaining that Russia continued to be the top oil supplier to India during the first half of the year and that as a result, India would face a tariff of 25% plus a penalty for the above, starting on August 1st. The Fox News host went to ask: “But India continues to get, instead of small portion, a great portion of their discounted oil from Russia, which is fuelling their war machine. How disappointed are you in this so-called ally?”

Rubio’s response was telling:

“Look, global trade – India is an ally. It’s a strategic partner. Like anything in foreign policy, you’re not going to align a hundred percent of the time on everything. India has huge energy needs and that includes the ability to buy oil and coal and gas and things that it needs to power its economy like every country does, and it buys it from Russia, because Russian oil is sanctioned and cheap and – meaning they have to – in many cases, they’re selling it under the global price because of the sanctions. And that – unfortunately that is helping to sustain the Russian war effort. So, it is most certainly a point of irritation in our relationship with India – not the only point of irritation. We also have many other points of cooperation with them. But I think what you’re seeing the President express is the very clear frustration that with so many other oil vendors available, India continues to buy so much from Russia, which in essence is helping to fund the war effort and allowing this war to continue in Ukraine.”

This turn in US-India relations was a major switch from the warm embrace between President Trump and Prime Minister Modi in February 2025. In a Joint Leaders’ Statement, they then announced the “US-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” – to drive transformative change across key pillars of cooperation.

In that Joint Statement, there was mention of plans to sign this year a new ten-year Framework for the US-India Major Defence Partnership in the 21st Century, a touting of the significant integration of US-origin aircraft, missiles and artillery into India’s defence systems, the joint development of autonomous industrial technologies, and a pledge to elevate military cooperation across all domains – air, land, sea, space, and cyberspace – through enhanced training, exercises, and operations, incorporating the latest technologies.

On the non-defence trade front, the Joint Statement spoke to expanding trade and investment to make their citizens more prosperous, nations stronger, economies more innovative and supply chains more resilient. They resolved to deepen the U.S.-India trade relationship to promote growth that ensures fairness, national security and job creation. To this end, the leaders set a bold new goal for bilateral trade – “Mission 500” – aiming to more than double total bilateral trade to $500 billion by 2030.

So, what happened? Some say that President Trump is peeved that Prime Minister Modi and India will not giving him credit for brokering a ceasefire between India and Pakistan during their most recent military confrontation. Pakistan’s Army Chief of Staff and President Shabaz Sharif, on the other hand, have both praised Trump for being the moving force in that ceasefire and have nominated him or pledged to nominate him for the Nobel Peace Prize. Most recently, Pakistan’s President once again touted Trump’s role in bring peace, this time to the Middle East, when he joined the celebration of the Israel-Hamas ceasefire at Sharm-al-Sheikh in Egypt.

The Congressional Research Service summarized the situation with the new tariffs thus: “In 2024, India was the 13th-largest US goods export market by country; the United States was India’s largest. The average most-favoured-nation (MFN) tariff rate was 3.3% for the United States, and 16.2% for India. Calling India, the “tariff king,” President Trump has imposed higher tariffs on India, among other partners, since January 2025. Invoking the International Emergency Economic Powers Act, he applied: a 25% India-specific tariff effective August 7, in a response to “large and persistent annual US goods trade deficits” (the 10th-largest US bilateral goods trade deficit in 2024 was with India); and a 25% tariff effective August 27 to address India’s imports of oil from Russia. Indian officials criticized the latter tariff as unfair, noting that other partners, such as the EU, do not face it. These measures, subject to some exceptions, would lead to a 50% tariff on India on top of existing tariffs.

On top of the tariff increases, the Trump administration’s actions have reduced severely the number of foreign students coming to US colleges and universities and threatened to reduce the total number of H1-B visas issued every year, and as well, threatened to tack on a $100,000 fee on each H1-B visa issued in future.India’s government and American companies dependent on talent from India have expressed great consternation at these moves.

Brains and talent

One would have thought that India would celebrate the idea that its brains and talent that have been until now largely siphoned off to the US will choose to remain at home to lead India’s advancement into the 21st Century and beyond. But that has not been the case. It’s not just that other countries around the world, seeing an opportunity, are now welcoming Indian talent to their shores. There is more.

Michael Beckley and Associate Professor of Political Science at Tufts University in Massachusetts and a non-resident fellow at the American Enterprise Institute, discusses some of the challenges facing India in an article in Foreign Affairs. He notes that only India has a workforce projected to grow in the next two or three decades and is thus shielded from demographic decline, which raises its hopes of becoming the next rising power. But he writes that India suffers from a crippling dearth of skilled workers with nearly a quarter of working age adults having no schooling at all. Of the remainder, 80% lack basic math and science skills. Nearly 90 percent of young Indians do not have essential literacy and numeracy. And the forces that want more H1-B visas in the US and those that invited Indians to other countries, only magnify this problem because of the brain drain. Beckley writes: “India sends more skilled migrants to advanced economies than any other country.” More than one-third of India’s top scoring students leave the country.

Bekley also writes: “The Indian economy amplifies these weaknesses. Labour and industry remain constrained: more than 80 percent of workers are in the untaxable informal sector, and nearly half of all industrial sectors have contracted since 2015. Infrastructure and trade are also limited: India’s busiest port handles only one-seventh the volume of China’s, and a quarter of the country’s trade with Europe and East Asia must pass through foreign hubs, adding three days in transit and roughly $200 to the cost of every container. Finally, the heralded services sector is narrow, with growth concentrated in IT firms that cannot absorb a vast labour force, leaving about 40 percent of college graduates in their 20s unemployed. India will remain consequential—its market large, its military strong by regional standards, its diaspora influential—but it lacks the foundations for true great-power ascent.”

Notwithstanding all of the above, India’s challenges are also America’s challenges. It is vital that these two countries find ways to bolster each other to contain China.

So far, the brain drain from India has been a key factor in America’s technological prowess. It is time for America to return the favour.

Cheerz…
Bwana

Mauritius Times ePaper Friday 24 October 2025