Smooth sailing seen in Indo-US ties in Trump 2.0

There is unlikely to be any major change in the bilateral relationship between India and the US following Donald Trump’s return to office, foreign policy analysts said, echoing external affairs minister S. Jaishankar’s remarks that India is not nervous, unlike many countries.

There may be some softening of Washington’s stance regarding New Delhi on some geopolitical issues where the US earlier held contrasting positions to India’s interests, analysts said.

Last month, US State Department spokesperson Matthew Miller nudged Delhi to cooperate with Ottawa in its investigation into the killing of Sikh separatist leader Hardeep Singh Nijjar.

The incumbent Biden administration had also maintained silence on attacks against minorities in Bangladesh as a military-backed caretaker government led by Muhammad Yunus came to power following the ouster of Awami League leader Sheikh Hasina.

“Ties between both countries is governed by underlying global and regional factors, particularly the shifting balance of power in the Indo-Pacific due to growing Chinese influence,” Harsh Pant, vice-president of the Observer Research Foundation think tank, said.

“These factors have allowed the relationship to navigate even the most challenging differences with relative ease. The relationship has seen unprecedented institutionalization, with various layers of government continuously engaging with each other, providing both nations significant room to maneuver,” he added.

Transactionalism will likely be the cornerstone of the Indo-US bilateral relations after Trump’s election.

India should prepare a case emphasizing what it can offer in exchange for technology and defense transfers from the US, analysts said, adding that it should work to ensure that any likely tariff increases remain sector-specific, unlike the broad tariffs expected to be imposed on China, which could face increases of 60-80% across many products.

“Given Trump’s transactional nature, Washington will increasingly ask what India can provide in return for technology, defense transfers, or economic assistance,” Pant said, adding that India needs to articulate clearly what it is doing and what it can potentially offer to help the US.

During his earlier presidency, Trump referred to India as the ‘tariff king’ and often mentioned it in the same context as China, signaling a potential sector-specific approach to tariffs unlike the broad measures applied to Chinese imports.

Pant said Trump’s administration would likely focus more on the global power race, and targeting India could risk losing a crucial ally in managing China.

“Instead of adopting a confrontational stance, there might be room for a new kind of trade relationship to emerge,” he suggested, while cautioning that no country, particularly India, can avoid the tariff challenges that might ensue once Trump is in office, and “India will need to brace for and prepare for these challenges.”

He added that his administration would focus more on the race for global power, so if the US targeted India, it would lose an essential partner who would be by its side in managing China.

He said, “So instead of becoming very confrontational, perhaps there is a space for a new kind of trade relationship to emerge.” He cautioned, however, that no country, particularly India, can get away from the tariff war that might ensue once Trump is in office, and India will be targeted in some ways. India will have to brace for that and prepare for that.

Former ambassador Anil Trigunayat said Trump, being a businessman himself and thinking in terms of deals, knows that during his first term he withdrew India from the Generalized System of Preferences (GSP) and imposed some tariffs on India, though these were not overly contentious.

He added that introducing new tariffs in his second term would align with his domestic policy objectives.

“If he imposes tariffs against India, we may gain elsewhere,” he said, noting that by pressuring China, Trump would prefer companies to return to the US, but if companies choose to relocate elsewhere, then India might emerge as a preferable alternative.

“To see that happen, India needs to implement economic and policy reforms in line with investor requirements,” he said.

During his run for the presidency for the second time, Trump warned that the US would witness the most extensive deportation program in its history.

Pant also noted that Trump said he would target illegal immigrants, but he has also stated that he appreciates “talented and skilled Indians coming to the US.”

He suggested that Trump might devise a sophisticated immigration policy that targets illegal immigrants while continuing to attract skilled talent to the US.

Trigunayat said immigration will remain a key issue under Trump’s policies and will pose challenges for India as it tries to negotiate migration mobility agreements and H1B visas.

However, he noted, “But we must not forget that the US, like other declining populations, needs talent, and that talent is likely to come from countries like India. From this perspective, we will have to work a bit harder on this issue.”

Pant observed an inherent contradiction between India’s ‘Make in India’ initiative and Trump’s ‘Make America Great Again’ campaign, both aiming to enhance domestic capacity.

“Both countries are pushing similar policy arguments,” he said, indicating that while there are parallels, they also present challenges as both nations strive to build their defense, technology, and economic ties.

Washington’s stance on the Indo-Canada standoff may see a shift under Trump 2.0, according to Pant.

He said that unlike the Justin Trudeau administration, which emphasizes values and principles like the rule of law, Trump has shown less interest in these debates, which could lead to a softening of the US’s position on issues critical to India.

“We can anticipate a dilution of this issue under Trump, who has had his own contentious interactions with law enforcement agencies in the US,” Pant said, suggesting a “fascinating juxtaposition” in approaches.

Pant said that although the Biden administration has been vocal about the India-Canada standoff, it is also clear that the US wants to maintain India as a key partner.
“Here you have Canada, one of the closest allies of the US, yet even under a Democratic administration, Washington is trying to hedge and maintain ties with India without jeopardizing them,” he noted.

On the complexities of India-US-Bangladesh relations, Pant indicated that the chief advisor of Bangladesh’s current government, Muhammad Yunus, is concerned about the change in US leadership.

“Clearly, Yunus has received considerable support from Washington, which is likely to diminish,” Pant said, adding that the Trump administration is unlikely to support the policies of the Biden administration concerning Bangladesh.

“I think we are going to see a tightening of the push towards Islamist extremism emanating from Bangladesh,” he added, noting that the Biden administration perceived Bangladesh under Sheikh Hasina as undemocratic, thereby justifying US support for anti-Hasina forces.

“Such arguments do not resonate with Trump, and Yunus, who is not a democratically elected leader, is unlikely to enjoy the same support he was believed to have received from the US,” Pant said.

During his election campaign, Trump appealed to Bangladesh to halt violence against minorities, Trigunayat said, suggesting that his appeal might have been aimed at wooing Hindu voters in the US.

However, given Bangladesh’s economic difficulties, Yunus will face pressure to act as he will require substantial funding from the International Monetary Fund (IMF). “From that perspective, Trump can be of some assistance in normalizing the situation there,” Trigunayat said.

Pant said that India and the US were seen holding juxtaposing positions in Bangladesh and Myanmar, but under the Trump administration, this is likely to change. “There is likely to be great synergy in their approaches, which will be beneficial for the regional security environment here,” he said

The Trump administration will be much more sympathetic to what India has argued and continues to argue concerning Bangladesh, the challenges associated with the type of government currently in power there, and all the consequences for regional security, Pant added.