The Stunning Reversal in U.S.-India Relations

Almost exactly six years ago, Donald Trump and Narendra Modi headlined an event in the Houston Texans’ football stadium called “Howdy, Modi.” Trump, then in his first term as President of the United States, and Modi, just beginning his second term as Prime Minister of India, held hands and waved to a crowd of around fifty thousand people. The two leaders had each risen to power by taking over their country’s dominant conservative parties—in Modi’s case, the Bharatiya Janata Party (B.J.P.)—and reorienting them around the demonization of ethnic or religious minorities and the promise of economic competence. During Trump’s Howdy, Modi speech, he said, “You have never had a better friend as President than President Donald Trump, that I can tell you.” There are more than five million people of Indian origin in the U.S., and in three Presidential elections Trump has steadily increased his vote share in that group, from under thirty per cent, in 2src16, to nearly forty per cent last year, according to some estimates. (Modi is tremendously popular with the Indian diaspora.)

And yet, despite the fact that Trump is back in office, and Modi was elected to a third consecutive term, the relationship between the two countries is at its lowest point in many years. Earlier this summer, Trump put a twenty-five-per-cent tariff on India; then, in late August, he doubled it to fifty per cent, arguing that the rate was meant to punish India for buying Russian oil. Trump had already enraged some Indians by taking credit for brokering a ceasefire, in May, between India and Pakistan, after the countries had engaged in their worst military conflict in decades. (Pakistan’s government said that it would nominate Trump for the Nobel Peace Prize; Modi, on a tense phone call with Trump, was reportedly unwilling to support such a proposal.) And now Modi, whose country was once seen by Washington as a bulwark against China in Asia, recently visited Tianjin as part of Xi Jinping’s push to create a new global diplomatic architecture without the United States.

To talk about the India-America relationship, I recently spoke by phone with Milan Vaishnav, a senior fellow and director of the South Asia program at the Carnegie Endowment for International Peace. During our conversation, which has been edited for length and clarity, we discussed why Trump has really turned against India, whether Modi’s political standing in India is finally showing some signs of strain, and why Indian Americans have been so quiet about Trump’s India policies.

Why do you think the America-India relationship has gone off the rails in the past few months? And why do you think the Indian government thinks it’s gone off the rails?

First, I think it has to do with this White House’s view of the global order and geopolitics, and second, it has to do with the personality of the President himself. Let me start with the first. One thing that is really striking is that there really doesn’t seem to be a coherent China policy in this Administration. You seem to have different factions that are jostling for primacy, and they have very different views about the China relationship. That’s important because part of how India has been sold within the American government is that it is this bulwark against China in the Asia-Pacific region. There’s been a bipartisan consensus on that. Once you take that out of the equation, India’s importance is no longer self-evident.

Then I think there’s the personality story. It is clear that this President is annoyed about what happened in the wake of the ceasefire between India and Pakistan. He did not believe that he got sufficient credit from the Indian side. Pakistan lavished him with praise, and nominated him for the Nobel Prize. India didn’t acknowledge the role of the United States at all, and so I think what we’re seeing is a mix of geopolitics and personal pique. [In April, after twenty-five tourists and one local Kashmiri were murdered in the Indian-controlled portion of Kashmir, India and Pakistan exchanged missile strikes. Pakistan has historically supported armed separatist groups in the region, which has been the site of numerous human-rights abuses by the Indian government.]

From an Indian standpoint, I think they’ve come to share both of those views I laid out. A former Indian diplomat who was visiting Washington said to me that they used to be able to have meetings at the Pentagon and the State Department and talk about how critical India was, in terms of the larger geopolitical competition with China. And nowadays they hear people of this Administration say, “Don’t tell me what you’re doing for us on China. Tell me what you’re doing for us as America.”

Yes, there is rhetorical anti-China energy from the Trump people, but, when you boil it down to specifics, it doesn’t seem like the President really cares. With the TikTok ban, for example, he seems to want to get the company’s American interests sold off to his allies. There is no broader strategic policy.

Take American policy toward South Asia writ large. One of the reasons this Administration has given for why it is hitting the reset button on Pakistan is that Pakistan is home to critical minerals and natural resources, and they don’t want to see Chinese control of those resources, which we value dearly. At the same time, they seem to be entering into a period of estrangement with India, which has always been seen as a much more important country in terms of countering China. So it seems to me that there’s a fundamental contradiction there, in terms of where the policy is going.

Do you believe what they are saying about Pakistan and natural resources? Jake Sullivan, who was President Joe Biden’s national-security adviser, recently said, “Because of Pakistan’s willingness to do business deals with the Trump family, Trump has thrown the India relationship over the side.” It’s true that Pakistan has got much more involved with cryptocurrency, though we don’t have evidence of direct Trump business deals. I also don’t want to fall into the trap of overanalyzing Trump’s actions or strategy.

No, I don’t think that natural resources are a critical driver here. I think that the Pakistanis have been very savvy in cultivating Trump and the Trump family. We know this President has a fascination with strongmen, and the way that Pakistan responded to the ceasefire was notable, right? They appealed directly to the President and lavished him with praise. India has long had this policy of wanting to deny a role for third-party mediation in what they see as a bilateral conflict.

This is the conflict over Kashmir that you’re talking about?

I’m talking about the recent conflict between India and Pakistan in May.

Right, but my understanding was that when it came to mediating Kashmir, which was the spark of the May conflict, India has also rarely wanted outside intervention, and the Pakistanis sometimes have.

That’s right. That’s been a long-standing objective of the Pakistanis. And in the aftermath of this brief conflict, the Trump Administration said that they would actually like to play a role in defusing the broader issue, which is about the status of Kashmir. Sergio Gor, who heads the office of White House Personnel, and who is the nominee for Ambassador to India, has now been given the title Special Envoy for South and Central Asian Affairs. I think many people in Delhi fear that he and other Trump officials will try to mediate what the Indians consider a bilateral dispute.

How has Modi tried to deal with Trump personally?

After the ceasefire, Modi was on the back foot. There were many people, particularly in the B.J.P. base, who had criticized him for stopping the conflict when he did. Pakistan [initially] had the upper hand and had shot down a still unknown number of Indian aircraft. We haven’t got a confirmation of how many; it could be two, it could be six. The government of India hasn’t told us. But, after that, most military analysts believe that the Indian military performed quite well and that Pakistani military installations were severely damaged. Then there was the ceasefire. And so Modi was already feeling defensive because people were saying he should have gone for the jugular. And the B.J.P. for many years has been fuelling this nationalism that says our job is not done until we take back the part of Kashmir that is occupied by Pakistan.

The idea that, in the wake of this, Modi was going to acknowledge that a third party essentially had a role in bringing this conflict to an end was just politically unpalatable. Now, in hindsight, I think there was probably a way for Modi to have done this by saying something as simple as, “We thank President Trump for putting an end to yet another bout of Pakistani military adventurism,” or something to that effect. But he didn’t do that. And, as time went on, it became harder and harder for him to do that, from a domestic political position. That brings us to this infamous phone call between Trump and Modi, in June. We don’t know what was said. Our understanding is that Modi tried to convey a message that there are certain things he could do privately, but not publicly. And that did not go over well. Now we are where we are—at fifty-per-cent tariffs.

The reason Trump has given for boosting the tariffs from twenty-five to fifty per cent is that India is buying Russian oil. My understanding is that India buying Russian oil was something that the Americans were essentially in favor of, because even though they wanted to sanction Russia, they didn’t want the global price of oil to skyrocket, which could have happened if a big oil seller like Russia was completely sanctioned. Is that your understanding, too?

That’s correct. After the Russian invasion of Ukraine, there were relatively few international takers for imports of Russian crude. India was one of them. Of course, India has a long-standing partnership with Russia. Russian oil was being offered at a good price. The Modi government was very concerned about the effects of inflation on electoral outcomes, particularly for an incumbent who had been in power for almost ten years at that point. And so they imported Russian oil on the understanding that as long as the import price stayed below a cap that had been set by the G-7, this was not going to constitute a violation of international norms or the Western-led sanctions regime. Eric Garcetti, the former U.S. Ambassador to India, said as much publicly while he was still in office.

The Trump Administration is basically saying, “Well, that was a Biden deal. We think it was a bad deal.” But I think you’re absolutely right. I don’t think this starts with Russian oil. I think Russian oil is a bit of a pretext. India seems to be a target because it doesn’t have many levers with which it can retaliate.

To take a step back, Modi became Prime Minister in 2src14, after, for several years, being banned from the United States for his role in ethnic violence in Gujarat. Pretty soon, he developed a fairly warm relationship with then President Barack Obama. That carried over to Trump’s first term and then to Biden, no?

I think there’s no question that we are at the lowest point in U.S.-India relations since the late nineteen-nineties, when the United States slapped sanctions on India in the wake of the 1998 nuclear test. [India and Pakistan each conducted nuclear tests that year, leading to international consternation and sanctions.] There have been other bumps in the road, but other than the odd trade dispute or some difference over intellectual property, this has been a relationship that has been moving on an upward trajectory. And I think the Indians felt very confident, frankly, about their position in a Trump 2.src Administration. They felt that, despite all of the volatility, all of the uncertainty, all of the turmoil of Trump’s first term, India actually fared reasonably well. It was during Trump’s first term in 2src2src that there were these border incursions by the Chinese military across the so-called Line of Actual Control that separates Indian-controlled and Chinese-controlled territory, and India felt that the U.S. came to its aid—not overtly, but behind the scenes in terms of providing both human and signals intelligence to help them track Chinese troop movements and the like. They were overly confident that Trump 2.src would essentially be a repeat of Trump 1.src, and that’s where they went awry.

The Trump Administration says it is going to raise the fees for new H-1B visas, which are visas for high-skilled workers, to a hundred thousand dollars. How has that played in India?

If you read the Indian press right now, the case that many people are making is that this is part of a concerted effort to undermine India. The fact that you’ve had a number of pretty outright hostile statements coming from Administration officials, such as Howard Lutnick and Peter Navarro, and now you have this move on high-skilled immigration—more than seventy per cent of H-1B holders are Indian nationals. So this really looks like an attempt to pick on India. Some people in India are viewing this as an opportunity, perhaps, to reverse brain drain, to bring back or retain talent. But, obviously, these people are looking abroad for a reason, which is that they don’t believe there are enough jobs in India. They don’t believe that there are enough paths to upward mobility and they believe that the business environment in India is simply not attractive enough to stay. And so I think it presents them with a real conundrum. This is the sixth-biggest immigration corridor in the world, and India is now by far the No. 1 recipient of global remittances. This has become a macroeconomic issue, and not just an issue about national pride and foreign policy.

If the tariffs remain at this high level, how much of an economic problem is it for India, and how much of a political problem is it for Modi?

I think it’s a significant economic problem because the Indians, in their negotiations, had been given to understand that they would end up with a tariff rate somewhere between fifteen and twenty per cent, which would put them in the ballpark of many of their other Asian competitors. But with fifty per cent, there are just entire industries that are labor intensive whose exports are no longer viable. India has been very late to the game of getting involved in textiles and garments and leather and footwear. These are blue-collar jobs that employ a lot of low-skilled labor; they’ve made an incipient foothold in some of these areas, and that could evaporate. Some economists are projecting that this would shave up to one percentage point off G.D.P. I think actually the number could be much higher because of ripple effects and what it would signal about the investment climate more generally.

On the political side, I think it’s a twofold blow for Modi. Part of his appeal is that he’s a “teacher to the world,” who has really put India on the map when it comes to foreign policy, particularly in terms of relations with the great powers. So this would be seen as a big failing that he couldn’t adequately manage Trump when many others have managed to figure him out much better. The second point is that, to the extent that Modi has a real political liability, it’s on economics. It’s on jobs. It’s on improving people’s daily lives. And if you look back at his eleven years, we see a very mixed performance on the economy. He benefits from a relatively fragmented opposition, but I think there’s a feeling within the B.J.P. that Modi can defy the laws of political gravity only for so long.

When you say “within the B.J.P.,” do you mean that the threat to him is internal?

Well, the one issue where the opposition could actually make a lot of headway is on the economy. They’ve not succeeded in making corruption an issue. It’s been difficult for them to make foreign policy an issue. Modi has always said, Look, I presided over the fastest-growing state when I was chief minister of Gujarat, and I’m basically going to translate that vision to the national level if you elect me Prime Minister.

I think right now the B.J.P. internal threat is relatively muted, because, to the extent there were other power centers within the Party, with maybe one exception, they don’t really exist anymore. And that’s partially because Modi has remade the Party in his own image. That second rung of powerful B.J.P. state leaders does not really exist. Basically, every chief minister who exists in India today, who belongs to the B.J.P., has been handpicked. The one potential exception is Yogi Adityanath, who does have his own political standings.

This is the far-right chief minister of Uttar Pradesh, who would be seen as being on Modi’s right?

That’s right. He would represent a threat to Modi coming from the political right, as someone who might be even more nationalist and even more hard-line than Modi.

Shashi Tharoor, an Indian politician who has been critical of Modi, recently met with some Democratic congresspeople who were visiting India. And he said that they had not heard from any Indian American constituents complaining about the way India was being treated by the United States. I would say, in my own life, with more conservative Indian Americans whom I’ve talked to about this, there’s a lot of hand-waving or playing this down. Why do you think that is, and has the right-wing Indian media minimized this somewhat because Trump is the one doing it?

I’ve been struck by how quiet and mealymouthed Democrats have been on this issue, given that it is an obvious way they can go after Trump. But I’ve equally been struck by how quiet the diaspora has been. I think there could be a couple of reasons for this. One is that they’re fearful. They’re fearful that if they speak up, they will draw undue attention to themselves and there could be retribution from the state. We know that, in 2src24, according to our data, there was a ten-percentage-point swing among Indian Americans toward Trump. And so I think there are people who are trying to grapple with their new political views.

I don’t think it’s because of the right-wing media in India. And the reason I say that is because, actually, the right-wing media in India has been very critical of Trump. The level of jingoism and rallying behind Modi has been very strong. In fact, there are a lot of voices within the B.J.P. ecosystem saying, “Every single major U.S. tech company has a campus in India. We could kick them all out tomorrow, and that’s our way to send a message.” Now, Modi has handled things very differently. He’s actually been very subdued in his messaging publicly. But I don’t think the right-wing ecosystem is actually feeding those messages of conciliation or underplaying the Trump threat. In fact, I would say that they’re playing it up quite a bit.

There had been this persistent feeling in India that India fares better under Republican Administrations than it does under Democratic ones. Privately, what I hear from officials in India is a bit of a lament that we actually didn’t know how good we had it under the Biden Administration. We had people like Jake Sullivan, who really believed and invested in this relationship. Now when we want to pick up the phone and call people in this Administration who might be our champions, we don’t actually know who to call.

Yes, I think there was a lot of concern from B.J.P. folks that, when Modi came into office, Democrats were going to lecture India about human rights and things like that, and I think mainly because of the centrality of China that fell by the wayside.

I would take it a step further. I would say that the Biden Administration really bent over backward not to make democracy or human rights a centerpiece of their India policy, when there was actually a lot of pressure from those on the left to do so. Even in the wake of an alleged targeted-assassination attempt of a U.S. citizen of Indian origin on U.S. soil. [In an indictment, the alleged architect of the plan was identified as a former Indian intelligence officer, and he is accused of plotting to kill a critic of the Indian government.] And so I think that, despite the rhetoric on democracy and human rights, there actually wasn’t a real difference in the policy between the first Trump Administration and the Biden Administration on the question of India’s own domestic transformation. ♦