Trump 2.0 and India-US Relations: What To Expect

Donald Trump’s return to the Oval Office has already set the stage for a reconfiguration of global geopolitics. Although Trump’s second stint as President of the United States is already making waves—and not always the kind India would prefer to surf. From his divisive executive orders to his hawkish Quad diplomacy, Trump 2.0 promises a turbulent ride, especially for India-US relations. While the inaugural gala saw an unexpected cameo by Khalistani separatist Gurpatwant Singh Pannun—an incident that may appear more theatrical than consequential—the real game is being played behind closed doors. The stakes? Trade, technology, and a shared Indo-Pacific strategy.

Trump 2.0: The Executive Order Blitzkrieg

Within hours of retaking office, Trump wasted no time in issuing 26 executive orders, including a seismic move to end birthright citizenship. If implemented, this policy could spell trouble for thousands of Indian professionals and their families in the US, especially those on H-1B visas, a majority of whom already face decades-long green card backlogs. Families who once viewed America as the promised land may now face an uncertain future.

In 2023 alone, Indians accounted for 74% of H-1B visa holders, making this a direct blow to India’s tech workforce. If challenged in courts, the policy may become a litmus test for Trump’s immigration agenda, creating yet another flashpoint in bilateral relations.

The uncertainty surrounding immigration policies is not just a human issue but an economic one. Indian Information Technology (IT) giants like Tata Consultancy Services (TCS), Infosys, and Wipro, which derive a significant chunk of revenue from the US market, could find their operating models disrupted. This isn’t just a headache for India; it’s a self-inflicted wound for the US economy, where a shortage of tech talent already looms large.

Coupled with Trump’s threatened 100% tariffs on BRICS nations shifting away from the dollar, India finds itself at a precarious crossroads. The message is clear: Trump’s America First doctrine remains as unapologetically transactional as ever.

Pannun at the Ball: A Diplomatic Sideshow

The sighting of Khalistani leader Pannun at Trump’s inaugural Liberty Ball grabbed headlines in Indian media, but the actual implications for US-India relations are marginal. While Pannun’s anti-India rhetoric may fan domestic outrage, his presence is more indicative of Washington’s laissez-faire attitude toward such fringe elements rather than a deliberate snub to New Delhi. Nevertheless, this incident underscores the challenges India faces in managing its diaspora and dealing with separatist propaganda on US soil.

The Quad: America’s Indo-Pacific Playbook

Barely 48 hours after his oath, Trump’s administration convened a Quad meeting, signaling that China containment remains a cornerstone of US foreign policy. Secretary of State Marco Rubio, a staunch China hawk, wasted no time in emphasizing the Quad’s renewed focus on security, economy, and infrastructure in the Indo-Pacific.

On the broader Indo-Pacific strategy, Trump’s America sought to bolster India as a counterweight to China. However, this wasn’t done out of the goodness of American hearts. Trump often reminded India that it needed to meet certain expectations—whether it was increasing its defense spending or ensuring the free flow of trade in the region. This framing of U.S.-India relations as a transactional deal rather than a friendship reinforced the idea that India’s value in the American context was defined not by shared values, but by being a counter-weight to China

Hence, for India, the stakes are twofold: maintaining its strategic autonomy while dealing with Washington’s growing push for alignment against Beijing.

However, skepticism lingers. Trump’s erratic diplomacy during his first term, punctuated by tariff threats and his fixation on economic imbalances, left many allies wary. Will the Quad remain a coherent counterbalance to China, or will Trump’s “America First” mantra dilute its collective purpose? For India, this uncertainty complicates its tightrope walk between the Quad and its pragmatic engagement with China.

The question remains: how much is India willing to pay for a seat at the table? And can it do so without compromising its strategic autonomy?

The Economic Tug-of-War

Trade remains a perennial thorn in India-US relations. Trump’s disdain for India’s high tariffs and trade barriers is no secret; his labeling of India as the “king of tariffs” during his first term still echoes.

Trump’s threat of 100% tariffs on BRICS nations attempting “non-dollar” transactions highlights his economic brinkmanship. India, with its growing ambitions for trade diversification and rupee-based exchanges, could find itself in Washington’s crosshairs. Consider India’s trade surplus with the US, which stood at $43 billion in 2023. This figure, while impressive, also makes India a target for Trump’s tariff tantrums.

Yet, this friction presents an opportunity. India could negotiate from a position of strength, leveraging its market potential and burgeoning defense partnerships. For instance, India’s recent purchase of 31 MQ-9B Predator drones from the US underscores the depth of the defense relationship. By smartly packaging its trade and strategic priorities, India can push for concessions on tariffs, technology transfers, and supply chain diversification—a classic case of turning lemons into lemonade.

But this requires both nations to move beyond their respective protectionist instincts—a tall order under Trump.

The Policy Shift: Less Idealism, More Realism

Be it Trump 1.0 or Trump 2.0, his foreign policy does not have much room for romanticism or idealistic notions of democracy promotion—unless, of course, it could be linked to business interests.

Instead, it remains “America First” all the way, and India, as the world’s largest democracy and a growing economic powerhouse, is a strategic partner worth investing in, but with one condition: it has to be a two-way street.

Trumps’s approach to India, as with much of his foreign policy, appears—how shall we say? —remarkably transactional. In the Trumpian world, everything has a price tag. For India, this means walking a fine line of securing deals and keeping the relationship mutually beneficial, yet without the deep-rooted, ideological entanglements that defined past American administrations.

Trump’s transactional diplomacy means that India would have to meet America halfway on defense deals, economic exchanges, and regional security, with a heavy emphasis on tangible benefits. After all, why spend on relationships unless there’s something solid in return? This approach led to a modest increase in U.S.-India trade, which totaled approximately $92.1 billion in goods in 2019. But there was more to it than just trade—Trump’s ‘deal-making’ mentality turned a simple diplomatic relationship into something akin to a high-stakes business partnership.

The U.S.-India bond, always a combination of shared strategic interests, cultural exchanges, and occasional diplomatic tensions, has gained a new twist during Trump’s tenure. The business mogul turned president saw the relationship through a decidedly commercial lens: What’s in it for America, and who’s bringing the biggest cheque?

The Transactional Trump Doctrine: A Double-Edged Sword

Trump’s worldview is a masterclass in deal-making, often cloaked in rhetoric but rooted in cold, hard cash. For India, this means every aspect of the relationship—from defense to trade to technology—will be viewed through a transactional lens.

Take Trump 1.0, it wasn’t about fostering a deep ideological connection with India. It was about securing what he saw as America’s interests, driven by a pragmatic—and often blunt—cost-benefit analysis. His approach was unmistakably transactional: he wasn’t just interested in strategic partnerships for the sake of long-term diplomacy, but in making sure India paid its fair share in the bargain. Take trade, for example. Under Trump, the U.S. pushed India hard on trade imbalances, with the administration adopting a more assertive stance on market access. The mantra was clear: India would have to play ball when it came to American companies operating in its market.

Trump wasn’t shy about leveraging economic and defense ties to drive his agenda. Trade deficits, defense deals, and access to the Indian market were central to the discussions. His transactional style became evident in the way he often linked military sales with broader diplomatic goals, making it clear that India’s purchase of American weapons, for instance, wasn’t just about securing defense—it was about bolstering the American economy.

Also See: Trump’s Return: A New Era or More of the Same?

The Big Defense Deals: It’s Not Just About the Friendship

Take, for instance, the defense deals that skyrocketed under Trump. From 2017 to 2021, U.S. arms sales to India touched new heights, with a whopping $18 billion worth of defense contracts signed. This wasn’t just for the sake of goodwill—Trump pushed India to invest in American military technology and weapons systems. One significant development was the $3 billion defense deal for 22 Apache and 15 Chinook helicopters. Trump made sure to underscore that such deals were part of a ‘fair exchange’—a hallmark of his approach to foreign policy. Of course, this wasn’t without its share of complexities. India, while benefiting from U.S. military technology, wasn’t entirely on board with being seen as just another purchaser in the geopolitical marketplace. With China breathing down its neck and the need to bolster its defense posture against regional threats, India had little choice but to engage, despite the price tag.

In another instance, his past demands for India to pay more for the CAATSA waiver on its S-400 missile systems purchase from Russia. Such moves force India to walk a diplomatic tightrope, balancing its ties with the US and its long-standing partners like Russia.

Trump knew what he wanted from India—reciprocity. In return for defense purchases and enhanced cooperation, India was expected to commit to a stronger partnership with the U.S. in areas like counter-terrorism, Indo-Pacific stability, and a hard stance against China’s regional ambitions. That was the cost of doing business in the Trump era.

Trade Wars and the Cost of Friendship

While Trump 1.0 transactional diplomacy benefitted both countries economically, there were also moments when the deal didn’t quite go as planned. For example, Trump’s steel and aluminum tariffs, which hit India hard, created an awkward tension. But Trump, being the dealmaker he is, wasn’t afraid to apply the pressure. India had to negotiate its way around tariffs and other trade imbalances with the U.S. on the clock, constantly scrambling to avoid punitive trade measures while trying to secure greater market access to America.

Moreover, under the Trump administration, India had to deal with the complexities of being a partner in the Indo-Pacific strategy while also handling its own regional priorities—mainly, managing its ties with Russia (especially concerning military deals) and the increasingly fragile relationship with Pakistan.

Trump wasn’t necessarily interested in solving India’s neighborhood challenges; he wanted results, which meant putting India in a position where it had to make decisions that benefited both parties strategically and economically.

Looking Ahead: Pragmatism Over Rhetoric

When analyzing the dynamic and, at times, perplexing relationship between India and the United States during Donald Trump’s presidency, the old adage “business is business” couldn’t ring truer. Trump 1.0 policy toward India was rooted in a distinctive transactional framework—one that hinged on ‘you scratch my back, I’ll scratch yours’ rather than the traditional diplomatic niceties and idealistic values often associated with U.S.-India ties. It was all about pragmatism over sentimentality.

Hence, the relationship was built on clear terms, centered on trade, defense, and regional strategy, and stripped of the usual diplomatic flourishes. India, with its growing influence, was not just a partner; it was a player. Trump’s approach, with its hard-nosed transactional flavor, might not have been warm and fuzzy, but it was undeniably effective in driving pragmatic outcomes—both for India and the United States.

If there’s one takeaway from Trump 1.0 era of U.S.-India relations, it’s that business really is business—and when the U.S. says “America First,” it expects the world to follow the rules of a high-stakes negotiation.

Similarly, Trump 2.0 is shaping up to be a mixed bag for India. While his policies may create hurdles, they also compel India to rethink its strategic priorities. The road ahead requires pragmatism: balancing India’s global ambitions with the realities of a more insular and unpredictable United States. Whether it’s countering China, managing the diaspora, or negotiating trade, New Delhi must prepare for a Trump presidency that is as transactional as it is transformational.

In the weeks and months ahead, the Quad’s trajectory, Trump’s immigration policies, and his approach to economic diplomacy will determine whether India and the US can script a new chapter or merely replay old grudges. One thing is certain: the world will be watching, and so will India—with cautious optimism and a readiness to pivot as needed.

After all, dealing with Trump is less about strategy and more about agility—think of it as a geopolitical Zumba class. Let the games begin.

SAT Editorial Desk

Your go-to editorial hub for policy perspectives and informed analysis on pressing regional and global issues.

South Asia Times

Trump 2.0 and India-US Relations: What To Expect