The drift in US-India ties is concerning

India is a linchpin in the strategic and technological competitions between the US-led coalition and Beijing, yet US – India relations are experiencing a sudden slide. The US and India share enduring strategic and economic interests that will outlast the present moment.

Not only is India more compatible with US strategic necessities and technological ambitions, but it is also a more reliable economic partner than the PRC in many ways. While China’s market is larger, US exports to India are growing faster. Choosing China over India would yield few short-term economic benefits and likely permanently entrench the CCP as the world’s dominant technological power.

The causes of the drift

Dhruva Jaishankar, head of the Observer Research Foundation’s DC office and son to India’s Foreign Minister, holds that two factors are driving a wedge between DC and Delhi: Pakistan and trade.

The US-India-Pakistan triangle has shifted in recent months, due in large part to Pakistan’s strikingly successful charm offensive in DC. In March, Pakistan helped the US arrest an ISIS leader responsible for a 2021 attack that killed 13 Americans in Afghanistan. Meanwhile, after hostilities broke out between India and Pakistan in May, President Trump then claimed credit for brokering a ceasefire, triggering concerns in Delhi, which has a deep-seated opposition to third-party mediation. Islamabad also nominated Trump for a Nobel Peace Prize while signing a letter of intent with the founders of the Trump-backed crypto group World Liberty Financial. Pakistan’s careful courtship is paying off, for now: the U.S. currently applies lower tariffs to Pakistan (19 percent) than it does to India (50 percent).

Tariffs on India are highly damaging. India is perhaps America’s most important long-term technological partner, and tariffs will slow growth in both economies. The impacts will be felt acutely in India, where over 400 million individuals subsist on less than $3.65 a day. Still, goods made up only two-thirds of Indian exports to the U.S. in 2024, and services trade remains tariff-free. Accordingly, while goods tariffs will bite the Indian economy, overall impacts will be limited.

Source: US Census Bureau, Author’s calculations

US – India economic and tech cooperation is crucial to competing with China

A US-India trade war will also damage US exporters in an important growth market. While annual goods and services exports to China are up only $10 billion since 2017, shipments to India have risen $35