How Bihar sets the stage for stabilising rocky US-India ties

Strong mandate in recent state election gives Modi leeway to reach a trade deal with US.

- Ravi Velloor Senior Columnist

"All politics is local" but local politics can set the stage for bolder moves in international politics.

That pithy phrase, widely associated with the late US House Speaker Tip O'Neill, comes to mind in the wake of the thumping victory by Prime Minister Narendra Modi's ruling alliance in Bihar's legislative assembly election in November.

The polls in the critical heartland state of Bihar were seen as a key test of Mr Modi's popularity, one which the National Democratic Alliance led by his Bharatiya Janata Party (BJP) passed decisively, winning 202 out of the 243 seats at stake. The strong mandate gives the Modi government greater latitude and leverage to clinch a trade deal with the US.

Indeed, it is an imperative. Not too long ago, the developing US-India relationship was thought to have the potential to decisively influence Asia in this century, but that promise was cast into doubt in 2025 as ties were disrupted by punitive American tariffs and presidential trolling of India.

The combined US tariffs on India now total 50 per cent on most Indian exports, including baseline duty, the "reciprocal" tariff announced on April 2, and an additional 25 per cent tariff imposed as punishment for New Delhi's obduracy on the Trumpian demand that it curb imports of Russian oil.

The tariffs have caused huge job losses in India's marine, garment and jewellery industries. They also have weighed on foreign investments headed to India, as well as the strength of the rupee.

The tariffs, trolling and a cooling of the Trump-Modi bromance has prompted an urgent reassessment of policy towards Washington within the Modi government, even as its rival neighbour Pakistan has found opportunity to improve its own standing with President Donald Trump.