THE CONTEXT: On 19 June 2025 President Donald Trump hosted Pakistan’s Chief of Army Staff, Field-Marshal Asim Munir, for a White-House luncheon—a move judged in New Delhi as a conscious return to the dated “India-Pakistan hyphenation”. Simultaneously, the United States Central Command (CENTCOM) Commander, General Michael Kurilla, lauded Pakistan as a “phenomenal partner in counterterrorism” during Congressional testimony. These signals have sharpened India’s perception that short-term tactical considerations in Washington are beginning to erode the carefully constructed idea of an autonomous, China-centric Indo-Pacific partnership.
BACKGROUND: TWENTY-FIVE YEARS OF STRATEGIC RELAXATION
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- 1998-2005 From Pokhran-II sanctions to the path-breaking Civil Nuclear Agreement, both sides discovered structural congruence.
- 2005-2020 Foundational defence pacts—Logistics Exchange (LEMOA 2016), Communications Compatibility (COMCASA 2018) and Basic Exchange (BECA 2020)—moved the relationship from arms-sales to interoperability.
- 2023-25 The Initiative on Critical and Emerging Technology (iCET) and its 2025 spin-off—TRUST (Transforming the Relationship Utilising Strategic Technology)—anchor cooperation in semiconductors, quantum, space and artificial intelligence. The February 2025 Joint Leaders’ Statement also unveiled Mission 500: a target to raise bilateral trade to US $500 billion by 2030.
THEORETICAL LENSES
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- Complex Interdependence: Dense technology and diaspora linkages raise the break-up costs of any diplomatic downturn.
- Neo-classical Realism: Domestic political-economy imperatives—America’s transactional mercantilism and India’s strategic autonomy—filter systemic pressures.
- Power-Aspiration Gap Thesis: India “punches above its weight”, yet India insists that sovereignty, not grandeur, is its guiding cue.
ECONOMIC PILLAR—THE NUMBERS BEHIND THE NARRATIVE
| Indicator (CY 2024) | Figure | Driver |
|---|---|---|
| Goods trade | US $ 129.2 bn (Exports $41.8 bn; Imports $87.4 bn) | Up ≈ 4 % YoY, despite residual Section 232 steel tariffs. |
| Goods + services trade | US $ 191 bn | Services—especially IT and professional services—now form > 40 % of total flows. |
| U.S. FDI inflow to India, FY 2024-25 | US $ 81.04 bn (provisional) | United States is India’s third-largest investor; electronics PLI and renewables draw bulk inflows. |
| India’s defence exports, FY 2024-25 | ₹ 23,622 crore (≈ US $ 2.8 bn) | 12 % YoY growth, signalling co-production upside. |
| India-made iPhone exports, Jan–May 2025 | US $ 4.4 bn, 97 % bound for U.S. market | Apple’s hedge against proposed 55 % China tariffs. |
DEFENCE & SECURITY PILLAR—FROM BUYER-SELLER TO CO-DEVELOPER
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- Industrial-integration leap: GE F-414 engine co-production for Tejas Mk-2 received U.S. export-authorisation in 2023 and is scheduled to roll off an Indian line by 2027.
- INDUS-X ecosystem: Since 2023, DIU-iDEX joint challenges have awarded US$ 1.2 million to ten U.S.–Indian start-ups in maritime intelligence and under-sea communications; the “Gurukul” series mentors 120 defence tech firms on export-control navigation.
- Foundational operability: Over 100 Indian naval and air assets now use U.S. satellite-derived ISR under BECA protocols, multiplying real-time maritime domain awareness in the Indian Ocean.
TECHNOLOGY & INNOVATION PILLAR
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- Open RAN/5G: A bilateral testbed announced under iCET has been mapped to India’s Bharat 6G Vision, plugging Indian standards into global deployments.
- Semiconductor “Arizona–Gujarat corridor”: Joint feasibility under TRUST aims at polysilicon supply and advanced packaging nodes by 2028.
- Quantum & AI: By December 2025 both sides will publish an “AI-compute roadmap” to ease cloud-GPU access for Indian researchers and start-ups.
PEOPLE-TO-PEOPLE & TALENT MOBILITY
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- Indian-origin residents in the United States now number 4.8 million, contributing US $ 200 billion to U.S. GDP annually through entrepreneurship and STEM leadership. Yet visa-policy gyrations introduce uncertainty. From March 2025 the H-1B registration fee jumps from US $ 10 to US $ 215, with employers already reporting a 27 % drop in FY 2025 filings.
CONVERGENCE DRIVERS—WHY THE RELATIONSHIP STILL MAKES STRATEGIC SENSE
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- Shared China challenge: A rules-based Indo-Pacific requires Indian heft west of Malacca and American weight east of it.
- Complementary political economies: U.S. capital and design expertise marry India’s scale and demographic dividend.
- Diaspora bridge: High-skill migration acts as “social infrastructure”, diffusing innovation and trust.
DIVERGENCES—A DEEP-DIVE INTO THE FAULT-LINES
| Divergence | Structural Roots | Manifest Example |
|---|---|---|
| Hyphenation relapse | Cold-War bureaucratic inertia in Washington | Trump-Munir lunch and CENTCOM’s praise of Pakistan blur counter-terror priorities. |
| Transactional tariffism | “America-First” election playbook | Threat of 25 % tariff on India-made iPhones despite supply-chain diversification. |
| Immigration politicisation | U.S. domestic labour angst | Quadrupling of H-1B registration fee and proposed 60-day grace-period cut. |
| Export-control drag | U.S. worries over dual-use tech leakage | Delays in delivering EMISAT-class space payloads and hypersonic test data sets. |
| Values discourse | Differing democratic norms and domestic politics | Recurrent Congressional hearings on religious freedom in India. |
THE ISSUES:
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- Strategic Signalling Gap: India’s doctrine of “multi-alignment” is often misread in Washington as fence-sitting, generating avoidable suspicion.
- Regulatory Friction: India’s average applied tariff (17 %) remains among the highest for large G-20 economies, cooling U.S. appetite for a deep trade pact.
- Technology-Denial Regimes: Outbound-investment screening proposed by the United States could restrict Indian capital flows into sensitive U.S. start-ups, complicating semiconductor joint ventures.
- Under-investment in R-D within India: Defence R&D spend is < 0.7 % of GDP—insufficient for co-development ambitions.
- Diaspora Visa Bottlenecks: Median processing time for H-1B extensions has touched 180 days, throttling scale-ups in AI and chip design firms.
- Opposition Narratives: Domestic lobbies in both countries weaponise labour, climate and human-rights arguments, risking policy reversals after every electoral cycle.
THE WAY FORWARD:
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- Lock the economy into the strategy: Formalise a 2 + 2 + Commerce dialogue so that trade irritants are addressed alongside defence and foreign policy. Embedding economic officials will prevent tariff surprises from blindsiding military cooperation.
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- Seal a BIT-Lite agreement: A narrow Bilateral Investment Treaty covering digital trade, investor-state mediation and tax certainty can be concluded fast without touching politically sensitive agriculture. Such a compact would reassure pension funds eyeing India’s logistics and renewable corridors.
- Green-light critical-mineral pooling: Launch a U.S.–India–Australia Critical Minerals Club linked to India’s KABIL venture, guaranteeing spodumene and cobalt for both nations’ battery ambitions. Joint offtake agreements can de-risk supply shocks and balance China-centric dependencies.
- Institutionalise visa self-renewal in India: Extending the 2024 domestic-renewal pilot to all STEM categories would cut consular backlogs by 35 % and signal that talent mobility is viewed as strategic infrastructure, not a concession. Streamlined mobility will sustain Silicon Valley–Bengaluru “brain circulation”.
- Operationalise GE F-414 exports. Time-bound certification will allow India to re-export F-414-powered Tejas Mk-1A to Southeast Asia, lowering unit costs by 18 % and embedding India in U.S. regional security architecture. Export earnings will fund India’s indigenous AMCA engine programme.
- Create a Quad-guaranteed Infrastructure Fund. Blending U.S. Pension Fund equity with India’s National Infrastructure Pipeline will mobilise US $ 25 billion, crowding-in private finance for port modernisation and green hydrogen hubs. Risk guarantees under the Blue-Dot Network will lower project-finance costs by 150 bps.
- Mainstream states in diplomacy. Empower manufacturing states such as Tamil Nadu, Gujarat and Telangana to run sub-national supply-chain roadshows in U.S. cities, translating federal MoUs into factory-floor investments. This “federal turn” will embed resilience deeper than chancery-level assurances.
THE CONCLUSION:
Despite episodic turbulence, the structural logic—democratic values, Indo-Pacific balance-of-power imperatives and deep tech-economy interdependence—remains unassailable. The true test, as past crises have shown, is not in moments of celebration but in disciplined course-correction during stress.
UPSC PAST YEAR QUESTION:
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
MAINS PRACTICE QUESTION:
Q. Transactional irritants need not derail strategic convergence in India–United States relations. Analyse
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