INTRODUCTION

India and the United States share a multifaceted partnership that spans economic, technological, and security cooperation. Recent discussions have reaffirmed their commitment to advancing mutual interests through strategic collaborations and global leadership. PM Modi was the fourth world leader to visit Trump after his re-election following Israel, Jordan and Japan.

About the Meeting

• President Trump and Prime Minister Modi launched a new initiative – the "U.S.-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” – to drive transformative change across key pillars of cooperation. 

• Under this initiative, they committed to a results-driven agenda with initial outcomes this year to demonstrate the level of trust for a mutually beneficial partnership.

Defense Partnership

• New 10-Year Defense Framework: Strengthening the U.S.-India Major Defense Partnership.

• Expanded Defense Sales & Co-Production: India to procure Javelin missiles, Stryker vehicles, and six additional P-8I aircraft.

• Integration of U.S. Defense Equipment: Includes C-130J, C-17, P-8I, Chinooks, Apaches, Harpoons, and MQ-9B drones.

• Reciprocal Defense Procurement (RDP): Negotiations to align procurement systems.

• Defense Tech & Fifth-Gen Fighter Review: U.S. to assess releasing advanced military tech to India.

• Autonomous Systems Industry Alliance (ASIA): Boosting AI-enabled defense collaborations.

• Industry Partnerships: Anduril-Mahindra (autonomous systems), L3 Harris-BEL (sonar tech).

• Tiger Triumph Exercise: India will host a larger tri-service drills with the US.

Trade and Investment

• Mission 500 Trade Goal: The U.S. and India aim to double bilateral trade to $500 billion by 2030 to promote economic growth, fairness, national security, and job creation.

• Bilateral Trade Agreement (BTA) by 2025: Negotiations will begin for a multi-sector Bilateral Trade Agreement (BTA), with the first tranche expected by fall 2025, focusing on market access, tariff reduction, and supply chain integration.

• Commitment to Reducing Trade Barriers:

• India's Tariff Reductions: Lower tariffs on bourbon, motorcycles, ICT products, metals, and improved market access for U.S. agricultural products (e.g., alfalfa hay, duck meat, and medical devices).

• U.S. Market Access for Indian Exports: Measures to boost exports of Indian mangoes and pomegranates and enhance trade in labor-intensive manufactured goods and agricultural products.

• Sector-Specific Trade Enhancements: Both countries will work together to increase U.S. industrial goods exports to India and Indian exports of labor-intensive goods to the U.S.

• Investment in High-Value Industries: The leaders committed to promoting greenfield investments in critical industries in each other’s countries.

• Job Creation: These Indian investments support over 3,000 high-quality jobs in the U.S.

Energy Security

• Reaffirmation of Energy Security Partnership: Both countries re-committed to collaboration in oil, gas, and civil nuclear energy to ensure affordability, reliability, and stable energy markets.

• Enhancing Hydrocarbon Production: Recognising the impact of energy prices, the leaders agreed to increase hydrocarbon production and expand strategic petroleum reserves to safeguard economic stability during crises.

• Support for India’s IEA Membership: The U.S. affirmed strong support for India’s full membership in the International Energy Agency (IEA) to enhance global energy cooperation.

• Boosting Energy Trade: The U.S. will expand its role as a leading supplier of crude oil, LNG, and petroleum products to India, ensuring supply diversification and stability.

• Investment in Oil & Gas Infrastructure: Both countries will increase investments in energy infrastructure and promote cooperation between U.S. and Indian energy companies.

• Advancing the U.S.-India Civil Nuclear Agreement:

• The leaders committed to building U.S.-designed nuclear reactors in India through localization and possible technology transfer.

• The Indian government’s amendments to the Atomic Energy Act and  Civil Liability for Nuclear Damage Act (CLNDA) were welcomed as steps toward addressing civil liability concerns.

• Plans to develop advanced Small Modular Reactors (SMRs) were endorsed for scaling up nuclear power generation in India.

Technology and Innovation

• Launch of Transforming the Relationship Utilizing Strategic Technology (TRUST) Initiative: Strengthening collaboration in AI, semiconductors, quantum, biotech, energy, and space with secure supply chains.

• AI Roadmap: Boosting AI infrastructure, data centers, and regulatory alignment in India.

• INDUS & INDUS-X: Industry-academia partnerships in space, energy, and defense tech.

• Supply Chain Resilience: Joint investments in semiconductors, pharma, and critical minerals especially the Minerals Security Partnership (MSP).

• Space Cooperation: Indian astronaut to visit ISS in 2025, NISAR launch, deeper space collaboration.

• Export Controls: Easing tech trade barriers while ensuring supply chain security.

Multilateral Cooperation

• Indo-Pacific Commitment: Support for a free, open, and peaceful region, ASEAN centrality, and maritime security.

• Quad Cooperation: New initiatives on disaster response and maritime patrols; India to host next Quad Summit.

• Middle East Engagement: Strengthening diplomatic ties, infrastructure investment in IMEC & I2U2, with new plans for 2025.

• Indian Ocean Strategy: New economic and security forum, major undersea cable investment by Meta.

• Counterterrorism: Strengthened action against Al-Qa’ida, ISIS, JeM, and LeT, emphasizing extraditions and accountability for Pakistan.

• Non-Proliferation: Joint commitment to preventing Weapons of Mass Destruction (WMD) proliferation and blocking terrorist access to such technologies.

People-to-People Cooperation

• Indian Student Contributions: 300,000+ students contribute $8 Billion annually to the U.S. economy.

• Higher Education Collaboration: Expansion of joint degrees, twinning programs, Centers of Excellence, and U.S. offshore campuses in India.

• Mobility Frameworks: Streamlining legal mobility while enhancing security against illegal immigration and trafficking.

• Law Enforcement Cooperation: Strengthening efforts against organized crime, narco-terrorism, and security threats.

• Enduring Partnership: Continued high-level engagement across governments, industries, and academia.

Issues

• Tariff Disparities: The U.S. criticises India’s high tariffs,  particularly on agricultural products (average 39%) and motorcycles (100%), while India sees U.S. tariffs as protectionist.

• India reduced the import duty on EV from 110% to 15%,, which now paves way for Tesla to be introduced into India, which might outcompete indigenous Indian manufacturers.

• Retaliatory Tariffs: The U.S. may impose new reciprocal tariffs on Indian goods, affecting exports in sectors like textiles, pharmaceuticals, and auto parts.

• India follows a protectionist high tariff policy in agriculture mainly to help Indian farmers but this has been alleged by the US as denial of market access.

• Economic Competitiveness: The "Make America Great Again" (MAGA) policy promotes domestic manufacturing, which could reduce opportunities for Indian companies.

• Trade Deficit Concerns: The U.S. aims to reduce its trade deficit with India, pushing for more Indian imports of American oil, gas, and military hardware.

• Energy Cost Challenges: India’s increasing energy imports from the U.S. could increase costs due to a strong dollar, transportation expenses, and dependency on global price fluctuations.

• India might have to forgo the cheaper Russian oil in favour of the US oil.

• H-1B Visa Uncertainty:Changes in U.S. visa policies, including stricter scrutiny of the H-1B programme, impact skilled Indian workers and IT firms.

• Trump is demanding India to invest in the US and bring jobs to Americans.

• Immigration and Deportation: The deportation of undocumented Indian nationals from the U.S. remains a sensitive bilateral issue.

• India ranks 3rd for illegal immigrants in the US, over 7 lakh at risk amid Trump's crackdown. Humanitarian issues in the way the immigrants were flown to India in cuffs and shackles and using a military aircraft has raised eyebrows. 

• Strategic Autonomy in Defence: While India is increasing U.S. defence purchases, it must balance these with its existing partnerships with Russia and France.

• The US is pushing India to purchase the Fifth generation fighter F-35s. But concerns are raised regarding the integration issues with the military platforms of India which are predominantly Russian, French and Israeli. F-35 is a single seater while India prefers a double seater aircraft.

• Extradition and Counterterrorism Cooperation:  The U.S. has agreed to extradite Tahawwur Rana, accused in the 26/11 Mumbai attacks, but India continues to push for stronger action against Pakistan-based terror groups.

• Trump has been largely non-committal in the issue of Pakistan based terror outfits.

WAY FORWARD

• Balanced Trade Negotiations: Both nations should engage in structured trade dialogues to reduce tariff disparities and promote fair market access.
  
• Diversified Energy Partnerships: India should negotiate favourable pricing for U.S. energy imports while maintaining diversified suppliers to manage costs.
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  Immigration Reforms: Bilateral discussions should ensure a predictable and fair visa system to benefit skilled professionals and businesses.
  
• Defence Collaboration with Strategic Autonomy: India must continue defence cooperation with the U.S. while preserving its independence in procurement decisions.
  
• Strengthening Economic Diplomacy: India should leverage economic diplomacy to negotiate exemptions or reductions in potential U.S. tariffs on its exports.
  
• Boosting Domestic Competitiveness: India should focus on internal reforms in manufacturing and exports to remain competitive despite tariff challenges.
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  Expanding Bilateral and Multilateral Engagements: Strengthening frameworks like the Indo-Pacific Economic Framework (IPEF) and Quad can help in trade and investment stability.
  
• Expanding People-to-People Ties :Promoting academic collaborations, joint research, and cultural exchanges will strengthen bilateral relations beyond trade and security.
  
  

CONCLUSION

As both nations deepen their ties across critical sectors, their partnership is poised to drive innovation, economic growth, and regional stability. Addressing trade imbalances, energy security, and visa policies while maintaining India's strategic autonomy will be crucial for sustaining long-term bilateral growth.

PYQ MAPPING

Q) “What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s National self- esteem and ambitions” Explain with suitable examples. (2019)

Q) ‘Indian diaspora has a decisive role to play in the politics and economy of America and European Countries’. Comment with examples. (2020)

Q) How will I2U2 (India, Israel, UAE and USA) grouping transform India’s position in global politics? (2022)

SAMPLE QUESTION

Q) Examine the role of U.S.-India cooperation in critical and emerging technologies, including AI, semiconductors, and space exploration, in shaping global power dynamics. (10 marks, 150 words)

Tags:
Polity

Keywords:
Modi in USA USA United States of America Donald Trump I2U2 NASA-ISRO Synthetic Aperture Radar NISAR Indo-Pacific Economic Framework for Prosperity IPEF COMPACT Bilateral Trade Agreement BTA Tariff Energy Security Partnership India Civil Nuclear Agreement Small Modular Reactors TRUST Initiative INDUS-X Quad IMEC Indian Ocean Strategy Weapons of Mass Destruction H-1B Visa Indo-Pacific Economic Framework IPEF