Trump's Geoeconomic Quake Hits India

Hope it jumpstarts badly needed second-generation reforms

- AJAY CHHIBBER

The gradual improvement in India-United States relations that began with President George W. Bush and was deepened by every US president since then has been upended. India is no longer seen by Donald Trump as a strategic partner in the geopolitical contest with China. Mr. Trump's punishing 50 percent tariffs and repeated insults have pushed India closer to China. The Indian Prime Minister attended the Shanghai Cooperation Organisation meeting this week after a seven-year hiatus and was welcomed by Chinese President Xi Jinping—something that would have seemed very unlikely just a few weeks ago.

The US will eventually realize that India cannot be bullied, but things may get much worse before they get better. Mr. Trump is urging the European Union (EU) to impose sanctions on India. Restrictions on H-1B and student visas are on the anvil, and Mr. Trump has just scuttled a Quad meeting that was to be hosted by India later this year—a grouping he had resurrected during his first term to counter China. China emerges as the big winner from all of this.

US Treasury Secretary Bessent believes that a bilateral trade agreement (BTA) with India is still possible. However, Mr. Trump may not allow it. According to him, India has even offered zero tariffs on some items—but that it's too late. Personal reasons have also been cited for the rupture, including Mr. Trump's reported pique over India's failure to acknowledge his role in the ceasefire with Pakistan, which he considers a Nobel-worthy achievement.