Resilient India Turns US Trade Tensions into Opportunity

Poonam Sharma
The changing outlines of Indo-US relations are again in the spotlight worldwide. Strategic partnerships in defense, space, wireless technologies, and artificial intelligence continue to advance, even as tensions emerge on trade and policy strategies. This is not new in a relationship as profound and complicated as that of the world’s largest and oldest democracies. India and America will see turbulence, but the pillars of cooperation stand firm — and the Indian economy, rather than being undermined, is flexing with resilience and vision.

 Defense

In the defense sphere, India has laid it out that some of the high-profile US projects, such as the F-35 combat plane or the “Striker” platform, are not our priority. This is not an avoidance of cooperation but a prudent coordination of acquisitions with national requirements and self-reliance objectives. The Indian Navy’s investment in the extended C-295 aircraft project, increasing production of indigenous carbines, and expansion of domestic defense industry players are indicators of a more confident industrial base. At the same time, India is open to partnerships that enhance capability without creating dependency — a strategic balance that ensures sovereignty while keeping doors open for technology transfer and co-development.

Calibrated approach  on trade

Trade negotiations are a more public arena of disagreement. While the US under the current administration has adopted as usual a “pressure-first” approach, India is taking a calibrated stance. Agricultural concessions — a limited easing of fruit, berry, and ethanol exports — have been selected so as to impose small costs on domestic producers. The concessions in agriculture do not damage India’s rural base and are strategically framed in consideration of the political composition of both nations. This is a understated but significant illustration of the way India is acquiring the delicate art of balancing domestic interests and global diplomacy.

Even as trade tensions continue to simmer — with potential tariff increases from the US on the cards — the truth is that most major Indian export industries are little impacted. For instance, 95% of exports have not been disturbed by tariff action so far. Narratives of “impact” may dominate headlines in September, but the actual economic shock is contained. Should the situation escalate beyond October and into December, reciprocal actions are possible. Yet, this is exactly why India is actively diversifying markets, strengthening domestic value chains, and expanding its footprint in ASEAN, the Philippines, and other parts of the Global South.

Modi’s Act East policy

Prime Minister Narendra Modi’s Act East policy is more relevant than ever. By projecting itself as a lower-cost, dependable alternative source, New Delhi is taking advantage of the trust deficit that some major powers have fostered in Asia-Pacific commerce. Nations in Southeast Asia are searching for suppliers who can provide quality and stability — and India is such a supplier. This is not merely a question of substituting one market for another; it is one of putting India at the center of an emerging Indo-Pacific economic corridor.

Technology Sovereignty as a Strategic Imperative

Technologically, India understands that true sovereignty requires control over engines, semiconductors, and aerospace systems. The French Dassault and Safran experience in developing standalone systems provides a blueprint. India’s own National Aerospace laboratories and CSIR also need to be benchmarked to the world’s best, and private-public partnerships at the center. Small drone technology, domestic aero-engines, and making advanced electronics is already on the cards but needs to happen faster. This is where the Atmanirbhar Bharat vision of the government intersects with national security — an overlap too vital to be ignored.

The upcoming festival season is yet another silver lining of hope. Domestic consumption has been the drivers of India’s economic resilience at all times, and with improvements in GST management, banking effectiveness, and supply chain enablement, the government can further build on this domestic drive. A dynamic domestic market serves as both a shock absorber to the world and a jumpstart for innovation. When 1.4 billion are fully engaged in the economy, growth isn’t a detached statistic — it is a living experience in homes, in markets, and in online transactions throughout the country.

Removing Bureaucratic Roadblocks

Yet to be able to tap this potential to its fullest, bureaucratic brakes need to be addressed. India’s leadership is committed to reforms politically, but the half-socialist inclination inherent in segments of the bureaucracy tends to impede implementation. A shift in culture in governing is required — one that sees business as a collaborator in building the nation, not a potential suspect. Progress here is evident, in the form of start-up policies, liberalization of FDI, and digital governance platforms, but yet more needs to be done to bring vision into street-level action.

The Indo-US strategic alliance will necessarily go through the phases of negotiation, recalibration, and even tension. But the overall arc is one of convergence. The United States itself recognizes, through several statements, that years of nurtured relations cannot be jeopardized by temporary trade tensions. India’s own approach is neither acquiescent nor confrontational; it is pragmatic — asserting where mutual gain is evident, and standing firm where sovereignty or long-term stability is involved.

India’s Voice in the Global South

In addition, India’s voice in the Global South is carrying greater influence. As the fourth-largest economy of the world, our capacity to give voice to concerns of emerging economies and provide pragmatic, affordable solutions is unmatched. In diamonds, machinery, or farm products, India is becoming increasingly adept at turning markets around and re-routing trade flows when needed. This resilience is the characteristic of an ascendant power.

In the end, today’s Indo-US trade tensions are not a existential challenge but a stress test — one that India stands in good shape to pass. Benefiting from strategic diversification, technological self-sufficiency, and a robust domestic consumption pool, the Indian economy is stepping into this phase from a position of strength. Realignment with global partners continues, but it is India’s capacity to find strength looking inwards while reaching outwards to opportunity that will determine its future course.

The message is unmistakable: India’s economic emergence does not depend on the benevolence of any one partner. The destiny is in a balanced, multipolar interaction where self-sufficiency and international integration feed into each other. In that, the Indo-US relationship — however sometimes turbulent — is still a precious, dynamic asset.