India’s complex relationship with the US was given an unexpected jolt by US President Donald Trump, who announced (August 6) an extra 25 per cent tariff on Indian exports as a 'penalty', since India is continuing to import Russian crude oil. Earlier, the US had imposed 25 per cent tariffs on Indian exports in July, and the steeply enhanced rate will come into effect on August 27 unless the mercurial Trump decides otherwise.
With the additional penalty, total tariffs on Indian exports to the US will rise to 50 per cent, making India the most taxed trading partner of the US in Asia. The measured but firm response from Delhi is that the US targeting India over Russian oil imports is "unfair, unjustified, and unreasonable".
While diplomatic negotiations and trade talks between India and the US will continue, there is the possibility of Washington arriving at a modus vivendi with Moscow over the war in Ukraine, thereby altering the ‘India is funding the war’ template. Concurrently, Trump has also hinted that a trade deal with China may happen — but he could also slap more penalties on Beijing, which is typical Trump ambiguity.
Strategic Context for the Current Situation
India’s abiding relationship with Russia and the more troubled one with China provide the strategic context for the larger India-US relationship, which precedes the current Trump presidency and merits recall.
India had an estranged and prickly relationship with the US for almost 40 years (1965–2005) over a deeply embedded security dissonance – especially the nuclear nettle. To his credit, US President George Bush picked up the gauntlet to improve ties with India and was ably complemented by the quiet resolve of PM Manmohan Singh.
For the US, the strategic trigger for such a radical transmutation vis-à-vis India was the concern about the rise of China and the advantages that would accrue to Washington in the maritime domain – the extended Indo-Pacific region.
Both leaders turned the page to move from bitter estrangement to cautious engagement, culminating in the historic 2008 nuclear agreement that accorded India a special status in the global nuclear domain — much to China’s chagrin.
India-US Defence and Security Cooperation
India-US cooperation in the defence and security sector soon picked up traction and in the last 16 years, Washington has become an important supplier of military hardware and a wide spectrum of cooperation has begun.
Foundational agreements (LEMOA, CISMOA) have been signed to enable deeper cooperation, and India has acquired almost $24 billion worth of military platforms and related hardware.
Quad: The Most Significant Development
The most significant development has been the formation of the Quad — envisioned in 2007 — which brings together the US, India, Japan, and Australia under one umbrella to harmonise their efforts in the Indo-Pacific.
US President Joe Biden elevated Quad deliberations to summit level in March 2021, and ever since, there have been regular meetings — the most recent held in late 2024 in Delaware, US
The Quad is not the equivalent of a naval NATO, even though Japan and Australia are military allies of the US, and India is more comfortable framing this as a strategic partnership among like-minded nations committed to promoting a free, open, and inclusive Indo-Pacific region.
This grouping has been criticised for being neither fish nor fowl, and the current focus is on cooperation in relatively ‘soft’ areas like maritime security, economic development, and vaccine diplomacy — with the unstated sub-text being that of countering China's growing presence and assertiveness in the Indo-Pacific.
India’s Dynamics with China Will Influence the Quad’s Relevance
The next summit of the Quad is scheduled to be hosted by India in the last quarter of this year, and much will depend on whether Trump will attend or dilute US participation.
This, in turn, will depend on the outcome of PM Modi’s visit to China in end-August for the SCO summit. While there has been a tentative thawing of the strained India-China bilateral, which is festering over the unresolved territorial dispute and growing China-Pakistan strategic cooperation (most recently evidenced in Op Sindoor) – the strategic conundrum for Delhi and Beijing is complex and multi-layered.
Trade binds these three major economies despite the Trump tariffs, but their strategic discord and dissonance are tangled and buffeted, both by market forces and the visible technological changes that are transforming the contours of cooperation, competition, and conflict.
The Quad remains an existential source of anxiety, and Beijing is aware that China will remain the ‘pacing challenge’ for the US security establishment well after Trump.
Is there a G2 on the horizon with a Trump-Xi rapprochement in the near future? Alternatively, can China and India bury the October 1962 hatchet and move towards a more accommodating bilateral that will resist US trade intimidation? And how will these exigencies — if they unfold — impact Russia?
Delhi’s Outreach in the Indo-Pacific Zone
Specific to the Indo-Pacific, Delhi has made some quiet but import-laden moves on the regional chessboard. The recent visit of the Philippines President Marcos Jr. to India highlighted the nascent strategic and security sector cooperation between the two nations, with Delhi reiterating its commitment to a free and rules-based maritime order.
Given the dispute between the Philippines and China over the South China Sea, this assertion by Delhi will raise hackles in Beijing. Furthermore, the Philippines is the first nation to have acquired the Indian BrahMos missile.
Conclusion
Against this rather complex and on occasion contradictory geo-political framework, with Trump tariffs looming large, Delhi’s optimum posture ought to be one of strategic patience and non-confrontational resolve in protecting its core interests.
For now, it would be desirable for Delhi to remain committed to the bilateral track with Washington regarding security and technology cooperation, and to strengthen the structural and institutional elements of what could still be the most consequential relationship of this century — even as negotiators try to hammer out a modus vivendi.
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