Will India-US Relations Survive Trump's Tariffs?

Once upon a time, about six years ago, there were media houses, opinion makers, politicians and cocktail circuit regulars, both in the US and India, who hated both President Donald Trump and Prime Minister Narendra Modi in equal measure. The two leaders’ ostensible friendship and bromance would be the end of the world, they felt. Now the Modi-haters in the US are more sympathetic towards the Indian prime minister, as their anger over Trump and his antics bubbles over every day. Many influencers in this camp say Modi has got a raw deal from Trump. In turn, the Trump haters in India are secretly rejoicing as he is taking on Modi like nobody else has. For them, the US president, who was the devil incarnate till a few months ago, is now the sweet avenger.

The irony of this situation sums up recent India-US relations. The Trump tariffs are the new low, the most damaging of steps in the see-saw, blow-hot, blow-cold tactics between the two biggest and the greatest democracies in the world. But the tensions were palpable even before.

As is well known, India and the US were on opposite camps during the Cold War years. America’s strong backing of Pakistan during the Bangladesh Liberation war of 1971, and President Richard Nixon dispatching the seventh fleet towards then East Pakistan to intimidate India, are etched in New Delhi’s institutional memory.

For decades, Indo-US relations have weathered turbulence, strategic alignments, economic disputes, and diplomatic recalibrations. In the last 25 years, since Bill Clinton’s landmark visit to India in 2000, successive governments in Delhi and Washington worked hard to improve relations and bring it up to its present level. Yet, even during this period there were several hiccups. One was over a US request to send Indian troops to Iraq for the 2003 invasion. The Bush administration wanted countries to show their support to Washington by action not words. As is well known, America was looking for an excuse to topple Saddam Hussein. In fact, plans were afoot for a regime change in Iraq soon after the Taliban was overthrown for not handing over Osama Bin Laden, the man who conceived the plan to hijack planes and crash them into iconic buildings at the heart of New York and Washington.

Atal Bihari Vajpayee was then the prime minister and L. K. Advani his powerful home minister, but very often the two Bharatiya Janata Party (BJP) stalwarts did not see eye to eye. Advani’s 2002 visit to the US was seen as an important event in the bilateral diplomatic calendar. At that time, there were no frequent high-level visits between the two countries. A Press Information Bureau (PIB) announcement of Advani’s trip noted: “He happens to be the first-ever Indian Home Minister to have been extended an invitation by the United States for an official visit in the recent past.”

Advani returned mighty pleased and told reporters: “US Defense Secretary Donald Rumsfeld broke protocol to come and meet me at my hotel on a weekend.” Yes he would, as the US was planning the invasion of Iraq and wanted America’s friends to join in the war to topple Hussein. He had been sounded out by Rumsfeld on this and he came back quite convinced it would help to solidify ties with the US. Vajpayee and Brajesh Mishra, his national security advisor (NSA), opposed the idea. An Opposition delegation went to meet the prime minister to request him not to give in to the US request.

Reportedly, he asked them to go out and organise protests, so India could tell the US that public opinion would not allow the government to send troops to Iraq. In hindsight, Vajpayee took the right decision on Iraq.

India’s nuclear ambition led to a strain in relations with the US. The nuclear tests, both in 1974 and in 1998, led to major tension. Indira Gandhi’s “peaceful” nuclear test, codenamed Operation Smiling Buddha, led to angry remonstration by the US. The US took action by halting all uranium shipments to India that had been agreed in 1963. The US was concerned that the nuclear fuel it had provided was used in the Pokhran test. Nuclear proliferation gradually became a major issue for the US. Lawmakers got involved to ensure that presidents could not take decisions without the approval of the Congress on non-proliferation issues.

By the time the Vajpayee government conducted the 1998 nuclear tests, the non-proliferation lobby in both the US and Europe had come into its own. The Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and the Comprehensive Nuclear-Test-Ban Treaty (CTBT) were now part of the nuclear non-proliferation regime. India refused to sign either agreement, saying they were clearly discriminatory and unequal, aimed at rewarding those who had already tested and proven their nuclear capabilities. When the Vajpayee government conducted two nuclear tests, the world, led by the US, came down heavily on India. President Clinton called China to discuss India’s nuclear tests, leading to fears in Delhi that the US and China would now gang up.

Economic sanctions were announced against the Vajpayee government. The sale of defence equipment, defence services and licences for the export of ammunition were stopped. All US foreign assistance was cut off, and US banks were prohibited from making loans or providing credit to the Indian government. India went through a tough time, but survived the economic sanctions.

All this, of course, came to an end when Clinton realised that India would not take dictation. The Jaswant Singh-Strobe Talbott talks began. By now, it was also apparent to the US that China’s rise was a challenge to its hegemony. Supporting democratic India and helping it to develop would help the balance of power in Asia and not lead to the complete domination of the continent by China. The neo-cons or the new conservatives, who came into office with George Bush, pushed the agenda of containing China. Bush got New Delhi the India-US civil nuclear agreement, and did the heavy lifting in the International Atomic Energy Agency (IAEA) to get the Europeans on board. There was much criticism of Bush by the non-proliferation lobby in the US.

India’s human rights record, especially following the Gujarat riots, was also an irritant between the two countries. Modi, then the chief minister of Gujarat, was banned from entering the US and several European countries. It was only after he won the 2014 elections that the Western world lifted the ban on his entry. Yet, India’s treatment of its minorities, especially its Muslim and Christians, were highlighted from time to time, when the Democrats were in power. When President Barack Obama visited India in 2015 as the chief guest at that year’s Republic Day celebrations, he showered fulsome praise on India, its people and Modi. But his parting shot was: “India will succeed so long as it is not splintered along lines of religious faith, splintered along any lines and it is unified as one nation.” Joe Biden too raised issues of human rights, but behind closed doors, and never in public.

Trump, more so than other Republican presidents, is not bothered about human rights and the domestic politics of other countries. But Trump’s tariff is a massive blow to the relationship. Besides, the US President’s claim that he was the peacemaker between India and Pakistan when Operation Sindoor ended infuriated India. His wooing of Pakistan army chief, Asim Munir, was another blow. His taunt that perhaps India could buy oil from Pakistan did not go down well with Modi supporters. The edifice painstakingly built by successive governments in New Delhi and Washington has now crumbled.

This has reignited the debate in India on whether the US can be trusted. Many in the country believe India would have benefited if it had hitched on to the American camp right after World War II for quick development. They point to the tiger economies of the early 1980s and 1990s, when East Asian countries South Korea, Thailand, the Philippines and Singapore were booming. China was not the economic power house it is today and the US provided the impetus.

Since India’s economic reforms, the pro-America lobby has expanded further, as aspirational parents could now afford to send their children to study there. The IT boom in India and the H-1B visas further fuelled the American dream.

The Washington lobby also points out that no other country—neither China and certainly not Russia—can provide what the US has to offer: the latest technology, enormous investments, weapons and diplomatic support. Moreover, the US can unlock doors that will help India to sit at the high table of global affairs.

But now there is a pushback from sceptics who believe that India should not align itself with the American camp. It should continue to assert its strategic autonomy. The Modi government appears to be inclined to do just that, expand trade relations with as many countries as possible, while keeping the door open for the US.

There appears to be a sliver of hope, with Trump’s conciliatory tweet last week about Modi being a great prime minister. “There is a very good Indian offer on the table, giving the US unprecedented market access and tariff concessions. It can be the starting point for a multiphase trade agreement and economic partnership. The US trade negotiators recognise that. Logically, political clearance should come at some point,” says Ashok Malik, the chair of the India Practice at The Asia Group. However, with a mercurial Trump, nothing is certain.

But any real balm to the strained India-US ties can only come when the stiff 50 per cent tariffs are re-negotiated. The pain of halted exports in textiles, gems and jewellery, handicraft, horticulture, and marine exports will soon be felt on the ground with small and medium businesses staring at empty order books. This, in turn, could lead to the shutting down of businesses and job opportunities. The tariffs will be the first hurdle to cross for any meaningful and productive ties between the two countries.

Seema Guha is a senior journalist covering foreign affairs.