It's a 'strategic disaster' but will Trump 'reverse the downward spiral'?

The India-US relationship, viewed not along ago as one of the defining partnerships of the 21st century, is now at a troubling crossroads. For decades, Washington and New Delhi have painstakingly built ties rooted in shared democratic values, common security concerns and converging economic interests. Yet, recent trade tensions and disagreements over energy policies have strained the partnership.

Former US ambassador to the United Nations, Nikki Haley, in a sharp opinion piece for Newsweek, issued a stark warning: “Scuttling 25 years of momentum with New Delhi would be a strategic disaster.”

She called on President Donald Trump to treat India not as a rival, but as a “prized free and democratic partner” essential to countering China. The message was clear—if Washington allows this relationship to unravel, the consequences for America’s long-term strategy in Asia will be dire.

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Weight of history and risk of rupture

Haley’s concerns echo a historical pattern of delicate engagement. In 1982, President Ronald Reagan toasted then-Prime Minister Indira Gandhi, affirming that while both nations might “travel separate paths from time to time, our destination remains the same”. The statement symbolised the resilience of ties despite moments of divergence.

Four decades later, however, the relationship faces a serious test. The Trump administration has announced a 25 per cent tariff on imports from India for continuing to buy Russian oil—on top of tariffs already placed on Indian goods. These steps follow months of disputes over trade barriers and US involvement in sensitive India-Pakistan negotiations.

Haley acknowledged Trump’s frustration with India’s Russian oil purchases, noting that they indirectly finance Vladimir Putin’s war in Ukraine. She also recognised India’s entrenched protectionism. But she drew a sharp contrast between India and China.

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China, she noted, remains Russia’s largest oil customers yet has escaped similar US sanctions. For Washington to punish democratic India while sparing authoritarian China, she argued, was not only inconsistent but strategically reckless.

India as a counterweight to China

The heart of Haley’s argument rests on geopolitics. India, she wrote, is “the only country that can serve as a counterweight to Chinese dominance in Asia”. This assertion highlights why the current turbulence is so dangerous. Allowing trade disputes to escalate into a prolonged rupture risks undermining decades of progress in forging an Asian balance of power favourable to the United States.

From America’s perspective, India’s role as a counterbalance to China is not hypothetical. They see the two Asian giants locked in territorial disputes, the deadly Galvan clash of 2020 serves as a reminder of that. Their economic interests are increasingly at odds, with New Delhi wary of Beijing’s Belt and Road Initiative and its encirclement strategy across South Asia. A strong India-US partnership therefore directly serves Washington’s core objective of containing Chinese ambitions.

Supply chain factor

Haley also highlighted India’s vital role in global supply chain realignment. As the United States seeks to “de-risk” from China and bring critical manufacturing back home, not everything can be reshored to American soil. India, with its vast workforce and cost advantages, stands as the only viable alternative for large-scale production of goods like textiles, smartphones and solar panels.

This is not just about economics—it is about resilience. By deepening trade and investment ties with India, the US can reduce its dependence on Chinese production, insulating itself from Beijing’s leverage over vital supply chains. Squandering this opportunity through tariff wars would weaken America’s position at the very moment when strategic diversification is most urgent.

India’s long-term importance

Haley framed India’s rise as one of the most significant geopolitical developments of the century. With more than 1.4 billion people, a young and dynamic workforce and the fastest-growing major economy, India is set to surpass Japan as the world’s fourth-largest economy in the coming years. Unlike China, whose growth is shadowed by authoritarian control and demographic decline, India’s democratic trajectory poses no threat to the free world.

The symbolism here matters. For Washington, partnering with a rising democracy bolsters the global narrative of freedom and open societies at a time when authoritarian powers seek to reshape the world order. Turning an ally like India, several experts are saying, is bound to weaken the US’s influence in Asia, besides eroding the very values America claims to defend.

Beyond economics, India’s expanding military cooperation with the US represents a crucial strategic asset. New Delhi has become a significant buyer of US defence equipment, while joint exercises and intelligence sharing have deepened. India’s role in the Indo-Pacific and its growing presence in West Asia further complement American security goals.

Haley stressed that India’s geography adds another layer of importance. Positioned along key maritime trade routes and at the centre of China’s energy flows, India has the potential to complicate Beijing’s strategic calculus in the event of a major conflict. To weaken ties with such a partner would be to hand China a strategic gift.

Path to reversal

Despite the current turbulence, Haley argued that it is not too late to “reverse the downward spiral”. What is needed, she wrote, is direct engagement between President Trump and Prime Minister Narendra Modi. Only high-level dialogue, backed by sustained attention and resources, can repair trust and restore momentum.

The US, Haley suggested, must elevate its approach to India to the level it devotes to China or Israel. Trade disagreements and energy disputes should be managed through hard dialogue, not punitive escalation. After all, difficult conversations are often signs of deepening partnerships, not failed ones.

Shared goals, shared future

At its core, Haley’s message is both a warning and an opportunity. On one hand, failing to stabilise India-US ties risks a “strategic disaster,” one that would embolden China and undercut America’s global standing. On the other, recommitting to India offers a pathway to stronger supply chains, balanced security in Asia and a durable democratic alliance.