Global Express | Arms sales, trade deals and Quad - it's a US-India reset

The big question is whether India has abandoned its policy of strategic autonomy – for a closer alliance with the US – at the expense of its ties with Russia.

Prime Minister Narendra Modi’s visit to Washington has been the most talked about event in a long time.

French President Emmanuel Macron did talk up Donald Trump’s ‘strategic disruption’ of Europe after the US President's telephone call with Russian President Vladimir Putin ahead of the Munich Security Conference raised the prospect of the war coming to an end -- to Russia’s territorial advantage.

But it was Narendra Modi -- only the fourth world leader to be invited by Trump less than three weeks after he took office -- who has set off a buzz across the globe. There wasn’t the usual pomp of a state visit. This was all about business, but despite all the brouhaha in the run-up to the visit about how ‘The Donald’ was going to press Modi to lower tariffs -- he’d called India ‘the tariff king’ in his first term -- and press for India to import more American goods and reverse the trade deficit, Trump seemed to have realized that while he could push through deals that could benefit America, he had to keep India on his side.

The pictures shared by the Trump team of the two leaders in a bear hug, of Trump pulling out a chair for Modi to sit on, repeatedly prodding the press to ask Modi questions, and raining compliments on Modi being a better negotiator than him, only added to the hype.

And the same was true of Modi who didn’t hold back either. During the joint briefing with Trump, he took off on Trump’s signature slogan 'Make America Great Again' (MAGA) saying India's vision was to 'Make India Great Again' (MIGA). “When America and India work together, this MAGA plus MIGA becomes a 'MEGA partnership for prosperity' - this mega spirit that gives new scale and scope to our objectives," he said.

But one of the biggest takeaways was Trump’s announcement that he and Modi had reached an important agreement on energy that would restore the United States as a leading supplier of oil and gas to India, with Trump saying “hopefully their number one supplier."

India's top oil supplier is currently Russia – followed by Iraq, Saudi Arabia and the UAE. The US only comes fifth. So are we going to see a shift in India’s much vaunted policy of ‘strategic autonomy’? What happens to India’s reliance on Russia as its main supplier of cheap, affordable oil? And as its main supplier of defence equipment?

The projection by most analysts is that US sanctions on the Russian shadow fleet are soon going to kick in, so India can easily pivot to the US for more oil.

On India shifting to buying American oil and gas, is it a move to keep Trump on India’s right side or will it actually benefit us? Trump’s rationale as he spelt out at the presser was this: America's trade deficit with India had reached $45.6 billion in 2024, and US and India will work to make up the difference. He said it can easily be done with the sale of oil and gas.

"The prime minister and I reached an important agreement on energy that will restore the United States as a leading supplier of oil and gas to India, hopefully their number one supplier," said Trump. India's top oil suppliers are currently Russia, Iraq, Saudi Arabia and the United Arab Emirates, with the US in fifth place.

The big question is whether India has abandoned its policy of strategic autonomy – for a closer alliance with the US – at the expense of its ties with Russia. Or will Trump and Modi’s obvious rapport give India enough wiggle room to keep its ties with Russia and the US on an even keel?

The other interesting aspect that emerged from the press conference was the greater convergence of India-US strategic interests -- on intelligence sharing, defence and China.

The Prime Minister had a set of meetings with the Trump team – most notably, the Director of intelligence Tulsi Gabbard – who is of Hawaiian origin but is a Hindu and a friend of Modi’s with Ram Madhav being sent to attend her wedding with gifts from the PM. Will this lay the ground for greater intelligence sharing?

There was talk of ISIS, of Pakistan continuing to be a terror haven, and of course the extradition of 26/11 Mumbai bomb blast terror perpetrator Tahawwur Rana – a Canadian of Pakistani origin. There is some criticism that we should be pushing for access to David Headley -- the real intel asset behind the Mumbai attacks. There is also talk that to pre-empt Trump from interfering in the India-Pakistan standoff over Jammu & Kashmir as he did the last time over India and China, Delhi is making moves to build bridges with leaders like Mirwaiz Umar Farooq.

Analysts are continuing to say that Trump’s tariffs will be India's biggest challenge going forward. Trump had publicly announced plans for reciprocal tariffs on goods imports from trading partners, singling out India as "a very hard place to do business in, because of the tariffs" there. Reciprocal tariffs will be clamped on India at some stage. New tariffs could start coming into effect as early as April 1.

India will have to balance its own trade deficit because US oil and gas might be more expensive due to a stronger dollar. Can India’s economy withstand Trump’s tariffs? India cut tariffs from 13% to 11% in its federal budget to pre-empt Trump. So we must ask the question - have we dodged tariff shocks or will we be affected? Will we cut tariffs further to please America?

Modi said that the two sides have set a target of more than doubling bilateral trade to $500 billion by 2030. "Our teams will work on concluding, very soon, a mutually beneficial trade agreement," he told reporters. That is something India has wanted for a very long time.

Trump also announced that the US will deepen defence ties by increasing military sales to India "by many billions of dollars," starting this year. "We're paving the way to ultimately provide India with the F-35 stealth fighters," the US President said. A fighter that incidentally India had not asked for.

And given that Turkey was removed from the list after it acquired Russia's S400 missile air defense system, which India also has, it will be interesting to see how far India goes. Its defence trade with the US went from near zero to $20 billion, making the US its third largest arms supplier. Russia remains its top source although its share dropped from 62% to 34% as India tied up deals with Israel and France.

Experts are saying this will be easier said than done. There are high maintenance demands, bureaucratic hurdles, export controls in terms of the transfer of sensitive technologies and the issue of private firms putting profit over partnerships.

But faced as India has, with delays and cost over-runs over its arms purchases from Russia, it could push India into American arms. The final agreement after the talks said, "Discussions are ongoing for joint development and production of Sea Picket Autonomous Surveillance Systems (Thayer Mahan), Wave Glider Unmanned Surface Vehicles (Boeing & Sagar Defence Engineering - 60 units planned for India), Low Frequency Active Towed Sonars (L3 Harris & Bharat Electronics), Multi-Static Active Sonobuoys (Ultra-Maritime & Bharat Dynamics Ltd.), Large Diameter Autonomous Undersea Vehicles (Anduril) and Triton Autonomous Underwater and Surface Vehicles (Ocean Aero)."

The two leaders talked up a 10-year defence framework that would allow easy purchase of defence goods and services, joint defence production, and nuclear plants for energy.

The other question is whether we are an unspoken alliance partner against China. President Xi Jinping is someone that Trump has showered praise on too. But look at what Modi said: "We will work together to enhance peace, stability and prosperity in the Indo-Pacific. The Quad will play a special role in this." That’s the four-way grouping with Japan and Australia and the US. Only days ago, we had China attack an Australian fighter jet, making renewed claims over the South China Sea.

India is hosting a Quad summit later this year in the fall, which Trump is set to attend. "India is a critical part of our Indo-Pacific strategy," a Trump administration official told reporters on a conference call previewing the meeting Thursday.

How much of the defence equipment that the US is willing to supply India is aimed at China, which now has stepped up its attempts to woo nations in India’s neighbourhood such as Pakistan – of course – with a greater investment in Gwadar, Nepal, Bangladesh and Sri Lanka?

On the issue of illegal immigration, Modi said India "completely supports" Trump's efforts to reduce illegal immigration. "We are of the opinion that anybody who enters another country illegally, they have absolutely no right to be in that country. Any verified Indian who is in the US illegally, we are fully prepared to take them back to India," he said. India had already received a flight carrying 104 deportees on February 5 under extremely harsh conditions, with another flight now landing in Amritsar.

PM Modi and President Trump did announce COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology for the 21st Century), an initiative aimed at transforming bilateral cooperation across defence, investment, trade, energy, innovation, and multilateral partnerships, that looks like the new nomenclature for India-US relations. As one Congressional Research Service report states, "the course of the US-India partnership will be a determinant of 21st century global dynamics". But the same report also has observers describing India as "the world's ultimate swing state".

So was this India pandering big time to the world’s superpower knowing that it has no country to fall back on, given the growing power of China? Or is this the beginning of a whole new reset of US-India ties as it slowly sheds its policy of non-alignment, of ‘strategic autonomy’, not unafraid any longer of being seen as part of one specific camp? Time will tell.