April 30, 2025
The Trump administration imposed a 26% reciprocal tariff on Indian goods, prompting India to pre-emptively lower tariffs on select imports
Both nations agreed to the Terms of Reference for a Bilateral Trade Agreement, aiming to double trade to $500 billion by 2030
Immigration policy under Trump’s second term balances legal pathways for Indian students with an intensified crackdown on undocumented immigrants
US Vice President JD Vance’s April visit advanced talks on trade, defence collaboration, and Indo-Pacific cooperation
The first 100 days of Donald Trump’s second term in the White House have brought sweeping changes to the US-India relationship, recasting the strategic and economic engagement between the two democracies with remarkable speed and ambition.
Since his return, Trump has signed 140 executive orders—many with direct implications for foreign policy. India’s impact has been immediate and multifaceted, from defence deals and tariff policies to immigration and counterterrorism cooperation.
Prime Minister Narendra Modi’s February visit to Washington proved pivotal. The unveiling of the “COMPACT for the 21st Century” marked a new phase in the relationship—a partnership framed by strategic trust and technological cooperation. Modi underscored the alliance’s potential by declaring that it creates a powerful engine for global prosperity when America’s “Make America Great Again” vision aligns with India’s “Make India Great Again” goals.
A central outcome of the summit was “Mission 500”, a shared commitment to double bilateral trade to $500 billion by 2030. Trade has taken centre stage in Trump 2.0’s policy on India, with the US president announcing a reciprocal tariff strategy intended to mirror India’s tariffs and protect American industry. The administration introduced a 26% reciprocal tariff on Indian exports, targeting sectors such as steel, aluminium, and auto parts, while leaving pharmaceuticals, energy, and semiconductors untouched.
India responded by reducing some tariffs to mitigate further US measures. Trade experts noted that India’s exposure was manageable, given that many US exports to India already face low duties. The tariff escalation was followed by productive negotiations, and by late April, the two countries had agreed on the Terms of Reference for a Bilateral Trade Agreement (BTA). These discussions span goods, services, digital commerce, and intellectual property.
As part of the talks, India offered to lower tariffs on $23 billion worth of US agricultural imports. In return, Washington sought broader market access for pharmaceuticals, manufactured goods, and IT services. A key proposal under review includes India’s potential adoption of a “forward most-favoured-nation” clause, which would benefit the US from any better trade terms India offers to future partners.
Immigration, a politically sensitive issue, remains complex. While Trump’s second-term policies have cracked down on undocumented immigrants—identifying 20,000 Indian nationals for repatriation—his administration has backed legal immigration, especially for students and professionals. With over 350,000 Indian students in the US, proposals to streamline green card pathways have been received positively.
India and the US also pledged to tackle human trafficking networks that exploit Indians seeking unauthorised entry. Plans to open US consulates in Bengaluru and Ahmedabad aim to reduce visa processing delays and discourage illegal migration.
US Vice President JD Vance’s visit to India from April 21 to 24—the first by a US vice president in 12 years—highlighted the importance of the evolving partnership. His trip coincided with a 90-day pause on tariffs, giving negotiators time to finalise key elements of the trade agreement. Vance’s meetings with PM Modi and External Affairs Minister S. Jaishankar focused on enhancing defence collaboration and reaffirming a joint Indo-Pacific vision.
Defence cooperation has entered a new phase. A decade-long military framework was announced, with the US offering advanced fighter aircraft and a commitment to joint development and technology transfer. Trump reiterated India’s role as a vital partner in the Indo-Pacific strategy, especially in balancing China’s regional influence. His administration has strengthened support for the Quadrilateral Security Dialogue (QUAD), with India, the US, Japan, and Australia aligning on regional stability and economic growth.
The administration’s hands-off approach to India’s internal affairs—distinct from past US governments—has helped build trust. Counterterrorism also featured prominently, particularly after the April 22 terror attack in Pahalgam that killed 26 tourists and was linked to Pakistan-based groups.
The US took a strong stance, reaffirming India’s right to defend itself and calling for regional stability. A spokesperson from the US government emphasised cooperation against terrorism, while PM Modi addressed the nation, condemning the attack and promising decisive action against those responsible.
Despite global turbulence, the US-India relationship has not only endured but deepened. India has deftly managed Trump’s assertive second-term agenda—navigating tariffs, immigration, defence, and regional security with pragmatism. The partnership now stands as a stabilising force anchored in shared values, economic ambitions, and strategic convergence.
Source: Times of India