New Delhi: Prime Minister Narendra Modi and Donald Trump share a friendly rapport, but analysts warn that ongoing trade disputes could strain their relationship if Trump returns to the US presidency. Despite their public camaraderie, Trump’s first term saw him take a tough stance on India, calling it a “tariff king” and “trade abuser.”
Trump had pledged to impose “reciprocal” tariffs on countries with trade surpluses with the US, a policy that could impact industries in the world’s fifth-largest economy.
Indrani Bagchi, CEO of the Ananta Aspen Centre in New Delhi, explained to AFP: “For decades, America has relied on cheap imports. But if manufacturing moves back to the US, what happens to countries with trade surpluses like India?”
India, which had a trade surplus of over $30 billion with the US in the 2023-24 financial year, is the ninth-largest trading partner of the US. Modi’s government has also been pushing for local manufacturing growth through the “Make in India” campaign, offering tax incentives and relaxed regulations to encourage new businesses.
The “Make in India” initiative has yielded results, with Apple and other major tech companies increasing their presence in the country as they seek to diversify their supply chains away from China. India’s leading tech firms, including TCS and Infosys, have grown into corporate giants by helping American companies outsource their IT services to more affordable labor markets.
However, this growth could be jeopardized if Trump follows through on his plan to bring jobs back to the US and potentially spark a “tariff war,” warned Ashok Malik from The Asia Group. While Trump’s trade policies will primarily target China, India could also feel the impact.
A Personal Bond Amid Growing Tensions
During Trump’s first term, both leaders expressed mutual admiration, notably at a joint appearance in 2019 in Houston, where they praised their strong personal relationship in front of 50,000 Indian-Americans. Modi reciprocated in 2020 by hosting Trump at a massive rally in Gujarat, attended by about 100,000 people. Trump described Modi as “a friend of mine,” adding that he appeared “like your father” but was “a total killer.”
Professor Harsh V. Pant of King’s College London noted that India’s strong ties with Trump are politically advantageous, as Modi’s leadership style aligns with Trump’s preference for strong leaders, offering India opportunities to capitalize on this personal bond.
Potential Diplomatic Strains: Immigration and Trade
However, challenges loom that could strain their relationship, particularly concerning migration. India is one of the largest sources of legal migration to the US, but recent years have seen a significant rise in illegal immigration, with many Indians crossing into the US from Canada and Mexico. This could become a major issue as Trump pursues his crackdown on illegal immigration, potentially leading to mass deportations, which could create a public relations nightmare, warned Bagchi.
India has also forged new partnerships with the US in defense, technology, and semiconductor manufacturing, and is a key member of the US-led Quad alliance, aimed at countering China’s growing influence in the Asia-Pacific. Yet, Pant expressed concerns about the unpredictability of Trump’s policies, noting that his transactional approach to foreign relations could inject uncertainty into the ongoing US-India cooperation. “Trump doesn’t view the world strategically, and his approach often brings complications and unpredictability,” Pant said.
