US-India Ties: Strategic or Transactional?

[Riaz Haq]

During the last Trump Administration in 2019, India's friends in Washington argued for a US policy of "strategic altruism" with India. The new Trump administration seems to be rejecting such talk. Prior to his recent meeting with Prime Minister Narendra Modi at the White House, President Donald Trump described India as the "worst abuser of tariffs" and announced "reciprocal tariffs" on Indian imports to the United States.  At the same time, Mr. Trump cracked down on both legal and illegal immigration from India. His administration is deporting thousands of illegal Indian immigrants in handcuffs and shackles on US military aircraft. Meanwhile, stringent new regulations on temporary work visas could significantly delay visa processing times and reduce the number of Indian workers employed in the United States on H1B visas. 

Tariffs Comparison. Source: BBC

In a 2019 piece titled "The India Dividend: New Delhi Remains Washington’s Best Hope in Asia" published in Foreign Affairs journal, authors Robert Blackwill and Ashley Tellis argued that the Trump Administration should continue the US policy of "strategic altruism" with India that began with US-India nuclear agreement. They asked President Trump to ignore the fact that the US companies and economy have only marginally benefited, if at all, from this policy. They see India as a "superpower in waiting" and urge Washington to focus on the goal of having India as an ally to check China's rise. They see Chinese support for India's arch-rival Pakistan and China’s growing weight in South Asia and beyond as a threat to India. 

India Tops Source Countries For H1B Visa Holders. Source: USCIS

Trump's trade and immigration policies are going to hurt India at a time when its economic growth is declining and job growth is stagnant.  The latest Indian annual budget has offered middle class tax relief to spur growth.  But economists warn it may not be enough for the vast majority of Indians, whose income still falls below taxable limits and who may still be reeling from the impact of the COVID pandemic, which devastated their earnings, according to a report in Aljazeera. “There is a vast base [of people] where recovery has not come back after the pandemic,” says Kaushik Basu, professor of economics at Cornell University. “We see this in data that the agricultural labour base has increased. And agriculture may well be just a parking spot.”

Illegal immigration from India to the US has dramatically increased on Prime Minister Modi's watch. A Pew Research Center report said that as of 2022, India ranked third, after Mexico and El Salvador, on the list of countries with the largest number of undocumented immigrants — 725,000 — living in the U.S.

India has a serious unemployment problem, particularly for the young people entering the job market by the millions each year. This problem is concealed by headline  economic growth figures highlighted by the Modi government. At the same time, India is losing its best and brightest in a massive brain drain. 

President Trump has clearly not taken the advice of India's friends in Washington. He is in no mood for "strategic altruism". Instead, the Trump Administration has signaled that it will treat ties with India as just another transactional relationship. 

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[Riaz Haq]

Rare Split Between Trump and Musk Over Tesla India Plans - Business Insider

https://www.businessinsider.com/rare-split-trump-musk-over-tesla-in...

President Donald Trump said it'd be "unfair" if Tesla opened a factory in India.
Tesla is looking to build a presence in India, posting job ads for showroom workers this week.
It has long been speculated that Tesla may have plans to build a production facility in India.
President Donald Trump said it would be "unfair" to the US if Elon Musk opened a Tesla plant in India — highlighting a rare point of difference in an interview designed to showcase the closeness of the president and his billionaire advisor.

In an interview with Fox News that aired Tuesday, Trump criticized India's tariff policy, under which electric vehicles face import duties of up to 100%.

Trump argued that it was "impossible" for Musk to sell a car in India.

"Every country in the world takes advantage of us, and they do it with tariffs," he said, adding, "It is impossible to sell a car, practically, in, as an example, India."

"Now, if he built the factory in India, that's OK, but that's unfair to us," Trump said of Musk. "It's very unfair."

Trump went on to say that last week, in discussions with India's prime minister, Narendra Modi, in Washington, DC, he threatened to impose reciprocal tariffs on India if it continued to impose high tariffs on US goods.

"It's — it's like, fair is fair," Musk commented approvingly.

Tesla has long sought to build its presence in India, which is projected to become the fourth-biggest economy this year. The country's protectionist tariffs, however, have proved a major obstacle.

Last year, India said it would lower EV tariffs for companies prepared to invest in manufacturing in the country, fueling speculation that Tesla could build a production facility there.

Musk was expected to announce a major investment during a trip to India last April but postponed the trip when Tesla announced plans to lay off 10% of its staff.

[Riaz Haq]

"They Take Advantage Of US": Trump's Latest Jab Over USAID Funds For India

President Donald Trump questioned why the US was providing aid to India, alleging that the country already benefits from high tariffs imposed on American goods.



https://www.ndtv.com/world-news/donald-trump-usaid-doge-elon-musk-t...

New Delhi:
US President Donald Trump today launched fresh criticism of the United States Agency for International Development (USAID) for allegedly granting funds to interfere in India's election process. President Trump questioned why the US was providing aid to India, alleging that the country already benefits from high tariffs imposed on American goods.

"Eighteen million dollars for helping India with its elections. Why the hell? Why don't we just go to old paper ballots, and let them help us with their elections, right? Voter ID. Wouldn't that be nice? We're giving money to India for elections. They don't need money," President Trump said today, addressing the Conservative Political Action Conference (CPAC) in Washington.

The "eighteen million" figure could not be independently verified as an earlier US government report through the Elon Musk-led Department of Government Efficiency (DOGE) claimed "$21 million" was allocated for "voter turnout" in India.

"They take advantage of us pretty good. One of the highest tariffed nations in the world. We try and sell something. They have a 200 per cent tariff. And then we're giving them a lot of money to help them with their election," President Trump continued.

[Riaz Haq]

For India, Bangladesh protests highlight dangers of jobless growth - CSMonitor.com

https://www.csmonitor.com/World/Asia-South-Central/2024/0809/Young-...

Prime Minister Narendra Modi is under growing pressure to create jobs, particularly for India’s educated youth.

After months of rising unemployment and higher-education scandals, some young Indians say they’re losing faith in getting ahead through merit. And some opposition leaders say India could be heading in the same direction as Bangladesh.

Neighboring Bangladesh has been wracked by weeks of violent protests, led by students frustrated by limited job prospects. Both India and Bangladesh face persistent unemployment and inequality despite overall economic growth, and until this week, both were run by long-ruling prime ministers who’ve been accused of authoritarian practices in recent years.

“What happened in Bangladesh … has given a message to people in power,” said Uddhav Thackeray, former chief minister of Maharashtra, after Bangladesh’s prime minister fled the country. “Don’t test the patience of people.”

Mr. Modi’s ruling Bharatiya Janata Party (BJP) has described such comments as incendiary and even anarchist, and political analysts note there are important differences between India and Bangladesh, including the former’s size and sprawl. Nevertheless, jobs are a major part of Mr. Modi’s platform; his government’s recently proposed budget includes $24 billion for job creation over the next five years.

“The situation [in Bangladesh] does put pressure on the government to address the employment issue more carefully, which they have not been doing effectively,” says economist Arun Kumar, who calls the budget announcement “more of a show.”

But for him, watching both countries grapple with similar issues highlights the relative strengths of India’s democracy. Compared with Bangladesh, where the opposition boycotted the most recent elections citing political suppression, India has a robust opposition and more freedom for dissent.



“In Bangladesh, a combination of factors created an explosive situation, something that has not yet occurred in India,” says the retired Jawaharlal Nehru University professor. “While unemployment in India is acute and the youth are frustrated, there are still avenues for expression.”

Employment crisis on the brink?
Unemployment has exceeded 5% every month this year, reaching an eight-month high of 9.2% in June before dipping to 7.9% in July, according to the Centre for Monitoring Indian Economy. This was a key issue for voters during India’s recent general election; a prepoll survey by the Delhi-based Lokniti-Centre for the Study of Developing Societies found that 62% of respondents believed finding a job had become harder compared with five years ago.

It’s a burden young people feel acutely. The India Employment Report 2024, released by the International Labour Organization and the Institute for Human Development in March, found that India’s youth comprise nearly 83% of the unemployed workforce. The proportion of unemployed youth with secondary or higher education nearly doubled, from 35.2% in 2000 to 65.7% in 2022.

Mr. Modi’s supporters have dismissed this data as misleading. BJP spokesperson Syed Zafar Islam said at a recent press conference that India is a leader in job creation, citing the latest Reserve Bank of India report, which states that 50 million jobs were created in 2023-24 alone.

International Monetary Fund Executive Director Krishnamurthy Subramanian has also pushed back on the idea that young people are unhappy with India’s job market. “There is no doubt that we need to create more jobs, that is because we are a young population,” the former chief economic adviser told The Quint this week. “But just because there is an emphasis on employment and job creation does not mean in a binary manner that jobs are not being created. … That’s important to keep in mind.”

[Riaz Haq]

Information technology worker Purushothaman Rajaram, along with software engineer Ekta Bhatia and data scientist Qun Wang, is leading a lawsuit against Meta Platforms, accusing the company of systematically favoring foreign workers over U.S. citizens to reduce labor costs, Reuters reported.

https://indiawest.com/bias-against-citizens-meta-must-face-lawsuit-...

On February 25, U.S. Magistrate Judge Laurel Beeler ruled that the three U.S. citizens could proceed with their proposed class-action lawsuit. The plaintiffs, all highly qualified professionals, claim they applied for multiple positions at Meta between 2020 and 2024 but were repeatedly rejected due to the company’s alleged preference for visa holders.

The case, Rajaram et al v Meta Platforms Inc, is being heard in the U.S. District Court for the Northern District of California, No. 22-02920.

Beeler’s decision cited statistics showing that 15% of Meta’s U.S. workforce consists of H-1B visa holders—far above the national average of 0.5%—as evidence supporting claims that the company favors foreign workers, Reuters noted.

Meta, headquartered in Menlo Park, California, denied the allegations, calling them baseless. The company stated it would “vigorously defend” itself, arguing there was no proof of intentional discrimination or that the plaintiffs would have been hired if they were not U.S. citizens.

The judge also referenced Meta’s October 2021 settlement with the federal government, in which the company agreed to pay up to $14.25 million to resolve claims that it routinely reserved jobs for temporary visa holders while excluding American applicants. “These allegations support the plaintiffs’ overall complaint that they were not hired because Meta favors H-1B visa holders,” Beeler wrote.

The lawsuit stems from a December 2020 government case against Meta, filed just weeks before former President Donald Trump left office. Beeler had initially dismissed an earlier version of the lawsuit, in which Rajaram was the sole plaintiff, in November 2022.

However, a divided federal appeals court revived the case in June 2023, citing Section 1981 of the Civil Rights Act of 1866, a Civil War-era law that bars discrimination based on “alienage” in contracts. Conservative groups have frequently invoked this statute in their opposition to workplace diversity initiatives, Reuters reported.

[Riaz Haq]

Sushant Singh
@SushantSin
Thinking of India’s vulnerabilities vis-a-vis China, Trump’s casting of Ukraine as the aggressor, and his description of the parts of Ukraine occupied by Russia as Russian, and his formula for peace - surrender - should serve as a warning. We are all Zelenskky now.
@tallstories

https://x.com/SushantSin/status/1896412969841705192

--------------------------

We are in Zelenskyy’s shoes now. Op Ed by Nirupama Subramanian

With Trump and Putin virtually on the same side, India can no longer fall back on Moscow

Trump’s casting of Ukraine as the aggressor and his formula for peace should serve as a warning.


India must now deal with the reality of a world where the friendships and partnerships of old may no longer count. with Trump in the middle, the US offers no consolation. With him and Putin virtually on the same side, India can no longer fall back on Moscow to exercise strategic autonomy. In its own neighborhood, India is not just friendless today; it has China glowering at it with Pakistan by its side. At a time when the developing world is looking for a country that can stand up to Trump's trade and tariff wars, many wonder what India truly stands for. Leading members of the Global South such as Brazil and South Africa are cummier with Beijing than with Delhi.

[Riaz Haq]

President Trump mentioned India and Pakistan in his State of the Union speech to Congress.

Trump announced reciprocal tariffs on Indian imports into US. He named countries that charge the US “tremendous" amount of tariffs which included India. “On average, the European Union, China, Brazil, India, Mexico and Canada …have you heard of them? And countless other nations charge us tremendously high tariffs than we charge them,” Trump said.

“It’s very unfair,” he added.

Singling out India during the speech, Trump said, “India charges us auto tariffs higher than 100 percent.”

Trump thanked Pakistan for arresting an ISIS man accused of killing American soldiers during Biden's hasty withdrawal from Afghanistan in 2021.

"I want to thank, especially, the Pakistani government for helping arrest this monster," he said. He also described it as "a very huge day for the affected families."

[Riaz Haq]

Suhasini Haidar
@suhasinih
No response from India on Trump April 2 tariffs . While announcement, that came while Commerce Min Goyal in DC, is disapponting for those who thought BTA talks would put off tariffs, officials hope theres still time for negotiations. Reporting
@the_hindu https://www.thehindu.com/news/national/no-response-from-india-on-tr...

https://x.com/suhasinih/status/1897467653825941681

--------------------

India did not respond on Wednesday (March 5, 2025) to U.S. President Donald Trump’s announcement that his administration planned to go ahead with reciprocal tariffs against India.


Mr. Trump’s speech came a day after Commerce and Industries Minister Piyush Goyal met his U.S. counterpart Commerce Secretary Howard Lutnick, and was due to meet U.S. Trade Representative Jamieson Greer for talks on the first phase of a Bilateral Trade Agreement (BTA) to be finalised later this year. The BTA was decided on during Prime Minister Narendra Modi’s visit to Washington on February 13.

India’s inclusion in the list of countries that would still face reciprocal tariffs after April 2 is believed to be a disappointment for those in the government who believed that Mr. Modi’s visit, and the promise of “fair-trade terms” in the BTA, could have postponed Mr. Trump’s decision. However, officials say there is still time for negotiation with the Trump administration.

Global responses
India’s silence on Wednesday (March 5, 2025) was in contrast to countries like China, Mexico, and Canada, which have already announced counter-reciprocal tariffs on U.S. goods. China and Canada have also filed complaints with the World Trade Organisation against the U.S. measures. While Brazil has not so far responded to the reciprocal tariffs, its President Lula da Silva had defied Mr. Trump’s threat over a further “100% tariffs” on BRICS countries last week, saying that such threats would not stop the emerging economies from seeking alternatives to U.S. dollar dominance, “no matter what”.

All eyes are now on the statements coming out of Mr. Goyal’s meetings in Washington this week on discussions for the BTA’s first phase. He and U.S. officials are believed to be looking at a number of areas where tariffs can be cut. Ahead of Mr. Modi’s visit last month, New Delhi had already announced tariff cuts on bourbon whiskey, wines, motorcycles, and electric vehicles.

[Riaz Haq]

No response from India on Trump tariffs so far
Disappointing, but may not be the final word, say Indian officials on U.S. reciprocal tariffs from April 2; Commerce Minister Piyush Goyal is in the midst of talks on a bilateral trade agreement, looking at areas where tariffs can be cut

https://www.thehindu.com/news/national/no-response-from-india-on-tr...

‘Fair-trade terms’
According to the joint statement issued in February, India and the U.S. will target $500 billion in bilateral trade by 2030, more than doubling last year’s trade value of about $200 billion, by ensuring “fairness, national security and job creation”.

“Recognizing that this level of ambition would require new, fair-trade terms, the leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025,” the statement had said, indicating an expectation of having a deal in place by September 2025.

Hailing the agreement last month, Mr. Goyal had said that the understanding Mr. Modi brought back with him had given the business community a lot of “confidence”, and a lot of “relief”.

[Riaz Haq]

Nifty, Sensex: India middle-class jitters amid stock market rout

https://www.bbc.com/news/articles/cz7vlezv05no

Two years ago, on his bank adviser's suggestion, Rajesh Kumar pulled out his savings - fixed deposits included - and shifted to mutual funds, stocks and bonds.

With India's stock market booming, Mr Kumar, a Bihar-based engineer, joined millions investing in publicly traded companies. Six years ago, only one in 14 Indian households channelled their savings into the stock market - now, it's one in five.

But the tide has turned.

For six months, India's markets have slid as foreign investors pulled out, valuations remained high, earnings weakened and global capital shifted to China - wiping out $900bn in investor value since their September peak. While the decline began before US President Donald Trump's tariff announcements, they have now become a bigger drag as more details emerge.

India's benchmark Nifty 50 share index, which tracks the country's top 50 publicly traded companies, is on its longest losing streak in 29 years, declining for five straight months. This is a significant slump in one of the world's fastest-growing markets. Stock brokers are reporting that their activity has dropped by a third.

"For more than six months now, my investments have been in the red. This is the worst experience in the last decade that I have been invested in stock market," Mr Kumar says.

Mr Kumar, 55, now keeps little money in the bank, having shifted most of his savings to the stock market. With his son's 1.8 million-rupee ($20,650; £16,150) private medical college fee due in July, he worries about selling investments at a loss to cover it. "Once the market recovers, I'm thinking of moving some money back to the bank," he says.

His anxieties reflect those of millions of middle-class Indians who have poured into the stock market from cities big and small - part of a financial revolution.

The go-to investment route is Systematic Investment Plans (SIPs), where funds collect fixed monthly contributions. The number of Indians investing through SIPs has soared past 100 million, nearly trebling from 34 million five years ago. Many first-time investors, lured by the promise of high returns, enter with limited risk awareness - often influenced by a wave of social media "finfluencers" on platforms like Instagram and YouTube, a mixed bag of experts and amateurs alike.

[Riaz Haq]

New norm in US firms force many Indians to miss H-1B lottery

Source: The Times of India
https://search.app/7Jp8BHjT18c2pR5bA

Hyderabad: A continuous churn in visa policies in the US, has pushed many Indians to the edge. In a recent move, several American companies have made it mandatory for those on Optional Practical Training (OPT) to work with them for at least a year before they can sponsor their H-1B. Result: Many freshly-minted Indian graduates with new jobs — hoping to participate in the H-1B visa lottery this March — are now forced to sit out of the process.
Incidentally, Indians comprise the largest group of H-1B visa applicants, making up nearly 72% of the lottery system's applications.
This policy shift aimed at filtering employees who can commit for a longer time in the company, OPT holders said, has added to their uncertainty.
"I was hoping to file for the H-1B lottery this March. But now, my employer has made it clear that they will only sponsor employees who have completed one year with the company. I will have to wait until 2026 for my first attempt," said a Hyderabad-based techie who was hired in Nov 2024, after completing his master's in computer science.
OPT is usually issued to students on F1 to work for one year post-completion of their education.
While many new recruits have been contemplating switching jobs to escape the one-year rule, they admit that it isn't easy. "Though I know I can make it for the March lottery if I move into a company that doesn't have this OPT rule, finding fresh employment is tough. Also, the visa transfer process isn't always straightforward," said another 25-year-old living in Los Angeles and working with a cybersecurity firm. She was hired in Oct 2024.
Take hit on pay, profile
The uncertainty is forcing many Indian students to make difficult choices — settle for lesser pay, junior profiles or just delay their plans for long-term work in the US.
"A friend of mine switched companies just to get the H-1B sponsorship, but his current job is a downgrade from what he was doing before. The pay is as much as 20% less compared to what the earlier company was offering," said Rohan Shah, studying data analytics in New Jersey. Shah is now stressed about his chances of finding a job with a company ready to sponsor his H-1B immediately. "What is the guarantee that they will sponsor after a year? And if they don't, where will we go? We will have to work odd jobs," he said.
Another student from Bengaluru, currently working in Texas as a programme manager said the shift in policy has left many students feeling vulnerable. "It's almost like a trap — you work hard to get a job, but the very company that hires you now wants you to prove loyalty for a year before they'll sponsor your visa," he said.
QUOTE
While employers are well within their rights to set internal policies on sponsorship, it does add an extra layer of uncertainty for immigrants navigating the already complex visa process. Switching jobs just to enter the lottery is not always the best long-term strategy. It's important to weigh career growth, job stability, and the likelihood of sponsorship before making a decision