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Nobody in India could have expected that the second term of the Trump presidency would be so challenging for India in terms of its foreign and strategic relations as well as economically. The personal bond that Prime Minister Narendra Modi had built up with Donald Trump during his first term was unprecedented. So much so, Prime Minister Modi actually went to campaign for him, besides hosting him at a mega event in Ahmedabad. There were special prayers for Trump this time. Hawans were performed in India for his victory. His election had led to a lot of euphoria across India.

 

The Indo-US relations are still “not strained.” Trump has not imposed any special tariff or tax on India. He has done it uniformly across the globe, not even sparing his traditional and longtime allies like Canada and Japan. He still calls India a “friend” and also describes Prime Minister Modi as his “friend.” Only his administration’s cozying gestures towards Pakistan are not much to India’s liking. But Trump has his own priorities in keeping Pakistan on his side to ensure a balance with China, which has built up deep interests and infrastructure in the South Asian country.

 

To suggest that Indo-US relations will be “disturbed” is to read too much merely on the basis of the current situation, which is not exclusive to India. As already mentioned, Trump’s trade regime may be punitive, but it is not selective, as he has not left out any country. It would be naïve to expect him to make any exceptions for India just because India is a friendly country. There are more friendly countries like Japan and South Korea, which have also not been spared the tariff stick.

 

The Trump administration has some influential pro-India people in it, particularly the Secretary of State Marco Rubio. It is not that Rubio can overrule Trump on his foreign policy, but he can and he will exercise a certain extent of influence on the policymaking. Rubio is a great supporter of India over others. He has always advocated strong Indo-US relations, suggesting that India must be treated at par with other staunch US allies like Japan, South Korea, Israel, and NATO countries. Trump indeed has started to treat India like all these allies, at least in terms of imposing tariffs.

 

Only last year, in July 2024, Rubio introduced a bill in the US Senate called the ‘United States-India Defense Cooperation Act of 2024.’ The ultimate aim of the bill is to foster and strengthen Indo-US relations in terms of defence, military, and economic cooperation. The bill has some more pro-India features, including reporting to the US Congress about Pakistan’s use of offensive force, including terrorism and proxy groups, against India, particularly in Jammu and Kashmir. The bill also proposed to bar Pakistan from receiving any security assistance from the US if it is found to have sponsored terrorism against India.

 

The bill has been referred to the Senate Foreign Relations Committee. With Rubio himself now being the Secretary of State, it should normally be expected that the bill would cross all the hurdles, if any. But given the current prevailing situation, it is likely to get delayed, if not shelved.

 

With such a friendly leader like Rubio holding such an influential position, that of the Secretary of State, India can at least expect to leverage his clarity about South Asia. Rubio’s prime motive in bringing the bill was to encourage and support India as a counter to China. However, much has changed in the last one year, since he introduced the bill on July 25, 2024. How much influence he can exercise over Trump about the bill, or whether he may be interested in pursuing it further, remains to be seen.

 

For India, particularly Prime Minister Modi, it is a very challenging situation. Modi has emerged as one of the “strongest” leaders of the country, known globally as much as his predecessors. He has raised the expectations of the nation as well. Already in his third term, he would like to leave some great footprints. Trump tariffs have come as a challenge and setback. These tariffs are certainly going to hit the economy in terms of growth and employment.

 

While he had launched the ‘Made in India’ and ‘Atmanirbhar Bharat’ (Self-Reliant India) campaigns long back, these have not translated much on the ground along the expected lines. Maybe the Trump tariffs will lead to extra focus on the ‘Made in India/Atmanirbhar Bharat’ campaigns. India has the advantage of a massive domestic market with a huge middle-class consumer base. He will, of course, have to navigate carefully, cautiously, and strategically to leverage the huge demographic dividend in terms of capitalising on the domestic market.

 

As the tariffs pose a challenge, they provide an opportunity as well. His popularity among the masses can come to his advantage. He can appeal and influence people to consume domestically produced goods. India has an abundance of production that is needed by the people. India can produce, and India can consume, without depending much on imports. Besides, the US is not the only country India can export to. There are diverse markets elsewhere also.

 

At the same time, Prime Minister Modi can incentivise foreign investors like Apple to continue producing their phones in India. One of the main targets was Apple’s manufacturing in India. Trump had repeatedly threatened Apple to shift manufacturing to the US or face tariffs. He has already imposed those tariffs. The Government of India can offer some incentives, like a “tax holiday,” to Apple to neutralise the extra cost that tariffs would lead to. It will be better to retain a manufacturer like Apple in India by offering incentives than letting it move out of the country. If Trump can impose extra tariffs, Modi can also provide some incentives to balance the tariff impact, and it is very much possible.

 

For Prime Minister Modi, Trump in his second term has posed an unexpected challenge that, for sure, is not very difficult to negotiate. Leadership is tested against adversities, and Prime Minister Modi is quite capable of facing adversities. One thing that is important is to take the entire country along with him. It should be Modi as a leader of the entire country and not just the BJP. Maybe for that, he will need to reach out to the country’s opposition parties and leaders also. That will provide him with extra strength and extra scope to deal with the situation. And this is important also, as he cannot afford a war on both domestic as well as diplomatic fronts.