India is seeking to deepen its partnership with the US under president-elect Donald Trump’s renewed leadership, anticipating shifts in trade, defence and technology. But while New Delhi sees Trump’s return as an opportunity to reshape supply chains and strengthen India’s global influence, analysts are wary of potential discord over tariffs and immigration policy.
Prime Minister Narendra Modi, who referred to Trump as “my friend” following the election, expressed confidence in advancing US-India relations.
Foreign Minister Subrahmanyam Jaishankar highlighted the economic opportunities, pointing to ongoing supply chain shifts.
“There was already re-ordering of the supply chain which was taking place (and) it is very likely that in view of the election results in the US, that would accelerate,” he told business CEOs during an ongoing visit to Australia.
New opportunities
Jaishankar said India sees Trump’s second term as a chance to catch up on missed opportunities in manufacturing – a sector the country struggled to grow in past decades.
He also predicted Trump’s second term will encourage a “global workplace”, adding that Trump may distinguish between immigration and mobility, potentially benefiting Indian professionals.
"The demographic unevenness of the world is beginning to bite us so that there would be economies where the demand would be high. In those countries, the talents may not be plentiful," Jaishankar added.
However, he didn’t address fears around potential visa restrictions or immigration crackdowns, which many in India are watching closely.
Currently, an estimated 725,000 undocumented Indians live in the US, along with 279,000 Indian nationals on H1B visas.
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Tariff test
While India is optimistic about collaboration, trade tensions – particularly around tariffs – may test relations.
Trump has called India "tariff king" and in October the Republican Party candidate said if elected he would introduce a tit-for-tat tax policy on countries that charged high fees on American products.
The United States is India’s largest business partner with bilateral trade crossing 177.5 billion euros in 2022.
“Trump may pressure India to cut tariffs and could impose higher tariffs on Indian goods, especially in automobiles, textiles, pharmaceuticals and wines, which could make Indian exports less competitive in the US,” Ajay Srivastava, of the Global Trade Research Initiative, told the Times of India daily.
Despite these concerns, former diplomat Pinak Ranjan Chakravarty believes US-India ties have matured past major disruptions, saying: “India-US relations will be a mixed bag under Trump, but our ties have reached a stage where a rollback may not be possible.”
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Geopolitical challenges
As the US-India relationship grows, complex geopolitical issues may come to the fore.
Jaishankar anticipates “more geopolitical hedging” as the two nations address challenges like Russia’s war in Ukraine and China’s rising influence in Asia.
Both India and the US have vested interests in regional stability, although differences in their approaches could emerge.
Modi and Trump have reportedly agreed to strengthen cooperation in key areas, including technology, defence, energy, and space according to a statement from New Delhi.
The leaders “reaffirmed their commitment to working together to further strengthen bilateral ties”, the statement said.
Tensions with Canada
Trump’s victory also arrives amid ongoing tensions between the US, India and Canada.
Just last week, US prosecutors charged an Indian national with plotting to kill a Sikh militant in New York, but Indian officials believe the new Trump administration is unlikely to prioritise the case.
Diplomatic strains continue between India and Canada over similar allegations, leading to diplomatic expulsions in both capitals.
