After the Prime Ministers of Israel and Japan and the King of Jordan, Prime Minister Narendra Modi became the fourth world leader Donald Trump hosted at the White House since becoming president. Soon after the president announced reciprocal tariffs, Modi and Trump spent four hours together in various engagements, showcasing strong personal chemistry, with discussions and outcomes reflecting a clear US shift towards a more transactional tone in ties. Although Trump, consistent with his persona, often evaluated matters through the lens of dollars, he was still mindful of the significance of the India-US relationship.
Endlessly stressing that a stronger Trump is upending everything would be a mere truism. India's true challenge is to strategically align its interests with the evolving landscape of American economic and foreign policy, ensuring it remains relevant in a changing global order where Trump no longer seems to be seeing America as the lynchpin it has been from the post-war period. India need not fret over the world order Trump is disrupting, as the Euro-American-centric system holds little value for nations like India, misaligned with the modern world's realities.
India should cautiously approach Trump's policies on trade and tariffs, requiring sensitive negotiations, despite New Delhi announcing talks for a bilateral trade deal and setting an ambitious bilateral trade target of $500 billion by 2030. As the US imposes tariffs on trading partners globally, including India, retaliation may not be limited to tit-for-tat duties. Other countries could reduce their reliance on the US dollar or take action in the Treasury market, which could also impact the US economy. Emerging Asian economies, with their relatively higher tariff rates on US exports, are especially vulnerable to increased reciprocal tariffs, which could significantly impact their economies. These nations will seek to negotiate space to mitigate the effects. For instance, India's leading importers of liquefied natural gas are already negotiating more US fuel purchases to address the trade deficit, while further cuts in American goods tariff are likely. The "buy more from us" policy offers India a chance to deepen cooperation in critical technologies, which could enhance its defence, and space manufacturing capabilities. The real challenge, however, will be how the "Make in America" and "Make in India" policies coexist. Finding common ground between the two will be the ultimate test.