The Dragon and the Elephant. Is the US-India relationship in peril?

India and the US are too important for each other’s success and security in too many ways for a dragon to drag them apart

By Anil Madan

The conventional wisdom is that China and India are adversaries. The conventional wisdom is that India is too dependent on Russia for oil and fighter aircraft. The conventional wisdom is that the US and India need each other to counter the threat posed by China. The conventional wisdom is that it is in India’s and America’s interest for the two countries to forge a strategic partnership to keep China from achieving overwhelming dominance in Asia and the Pacific. The conventional wisdom is that India must resist bullying by the US and therefore find rapprochement with China while maintaining a solid trading relationship with Russia. The conventional wisdom is that India must find a way to navigate this maze. Conventional wisdom is right to some extent. But the conventional wisdom may be too simplistic.

Viewing the Sino-Indian relationship from a 2024 perspective, one would hardly have expected President Xi Jinping and Prime Minister Narendra Modi to commit to strengthening strategic ties at the recent meeting of the Shanghai Cooperation Organisation.  But that meeting took place against the backdrop of both countries facing significant tariffs imposed by President Trump on their exports to the US. Pic – Asia Times

Viewing the Sino-Indian relationship from a 2024 perspective, one would hardly have expected President Xi Jinping and Prime Minister Narendra Modi to commit to strengthening strategic ties at the recent meeting of the Shanghai Cooperation Organisation.  But that meeting took place against the backdrop of both countries facing significant tariffs imposed by President Trump on their exports to the US. To be sure, China had worked a pause during which tariffs were reduced but the prospect of higher levies remained. From an Indian perspective, Trump’s reasons for imposing a 50% tariff on India, viz., because it imported Russian oil and thus funded Putin’s war against Ukraine and is a member of BRICS which is generally opposed to the US, seemed unfair and one-sided. After all, China too imported Russian oil. And let us not forget that the EU countries as well continued to import Russian natural gas and oil.

President Xi seemed on a charm offensive when he declared in remarks in a meeting with the Indian delegation, that China and India were among the world’s great civilisations and said to Prime Minister Modi that it is vital to be good friends, a good neighbour, and for the dragon and elephant to come together.

So, are the US and India drifting apart and the China and India drifting closer together?

The steep 50% tariffs levied by Trump’s executive order are a punitive threat to India’s trade with its largest export partner, the US. The Indian government estimated that the tariffs will impact some $48 billion worth of exports. Business owners and government spokespersons have fretted that exports to the US market will no longer be commercially viable. In turn, the tariffs if continued will lead to job losses and dampen economic growth.

India’s economy has been one of the fastest growing among major countries and trade relations with the US have been a key part of that growth. A think tank founder, Ajay Srivastava, a former Indian trade official, was reported to have described the new tariff regime as a strategic shock that threatens to wipe out India’s long-established presence in the US.

Concerns about a fracture in the strategic importance of India and the US to each other may be overblown. Jake Sullivan, President Biden’s National Security Adviser was from a different administration. Nevertheless, his remarks at the Indian Institute of Technology, New Delhi, in January of this year emphasized that the India-US partnership is critical for stability and security in the Indo-Pacific. He declared that as a result, America is deeply invested in India’s success and India in America’s success.

Sullivan recited some statistics worth keeping in mind.  Over 1,000 American companies are operating in India. Over $50 billion in foreign direct investment flowed into India from the United States, and Indian private sector investment in the United States recently surpassed that of China – investments that, by some estimates, are generating over 400,000 US jobs. And over 300,000 Indian students are studying in the United States. In fact, international students in the US come from India more than any other country in the world.

Just last month, President Trump’s nominee for ambassador to India, Sergio Gor,  dismissed fears that India was drifting towards China. He pledged to draw India closer to the US and to open its markets to American goods. Nevertheless, he also pledged to get India to end purchases of Russian oil. That, of course, was a theme in Trump’s recent address to UN General Assembly — that not only India, but China and Europe must stop purchasing Russian oil and thus funding its war against Ukraine. Perhaps India wasn’t being singled out after all. And Sergio Gor told US senators, during his confirmation hearing, that India and China had little in common and were unlikely to forge closer ties. “While we might have our moments of hiccups right now, we are on the track of resolving that. Our relationship with the Indian government… is much warmer,” said Gor.

Mr Gor said he would make it a top priority to ensure that India “is pulled in our direction, not away from us,” and added that he will deepen ties on defence and technology cooperation. Elaborating, on his pledge, he committed to prioritizing deepening defence and security cooperation with India, expanding joint military exercises, advancing joint development and production of defence systems and concluding critical defence sales.

It seems that the US commitment to the Quadrilateral Security Dialogue (QUAD) comprising the United States, India Japan, and Australia remains very much in place.

Mr Gor seems to echo the sentiments expressed by Mr Blinken, then Biden’s Secretary of state that: “This is a moment of unprecedented strategic alignment among our four countries. We have four countries that are united by a shared vision for a free and open, connected, a secure, a prosperous, resilient Indo-Pacific region.”

So, who wins here? Does the dragon succeed in courting the elephant, or is there more to the story?

One would think that the deep penetration of the Indian diaspora in America’s tech, defence, and financial businesses would predispose India to tilt to the US. And, of course, there is the longstanding hostility between India and China, lingering border disputes and now trouble over water rights, all of which suggest that papering over the differences is a Herculean task. Are Trump’s tariffs enough to push China and India closer together? Can there be a new era of cooperation between China and India?

If there is to be such cooperation, can India stand to let China dominate, unchallenged, the Indo-Pacific region? That hardly seems possible.

The recent signing of the Strategic Mutual Defence Agreement between Saudi Arabia and Pakistan with the extension of Pakistan’s nuclear umbrella to Saudi Arabia may be the factor that changes everything. Although, according to CNBC, an unidentified “senior” source told that outlet that Saudi sales of oil to India would continue uninterrupted despite that agreement with Pakistan, it is difficult to predict what will happen if another India-Pakistan conflict flares up.

The dilemma for India is that it probably needs to continue buying Russian oil and thus antagonizing Trump. China is not the answer because it has no oil to sell to India. On the other hand, Trump’s efforts in bringing the leaders of Armenia and Azerbaijan together in the White House, opens the possibility for the flow of Central Asian oil and gas to India as well as to Europe.

Further complicating the U.S.-India relationship is Trump’s recent announcement of a $100,000 one-time application fee for H1-B visas, under the program that allows skilled tech workers, doctors and nurses visas to work in the US.  One must think that given the provisions of Trump’s Executive Order allowing for exemptions and waivers for certain companies, the H1-B fee is unlikely to survive to any meaningful extent. So, I see this as a disappearing problem.  

To me, the conclusion seems clear. India and the US are too important for each other’s success and security in too many ways for a dragon to drag them apart.

Cheerz…
Bwana

Mauritius Times ePaper Friday 26 September 2025