U.S.-India Relationship: Partnership Poised for Growth

Donald J. Trump joins Indian Prime Minister Narendra Modi in conversation during their visit to the home of Mohandas Gandhi on Feb. 24, 2020, in Ahmedabad, India. / White House Photo

The U.S.-India relationship has long been a cornerstone of global stability, rooted in shared democratic values, economic interdependence, and strategic alignment. With the new administration, led by President-elect Donald Trump, set to embark on its second term, a renewed era of bilateral collaboration is poised to emerge. As both nations strive for mutual growth and cooperation, their strategic partnership can expand across various domains, reflecting a shared commitment to economic progress, technological innovation, and global leadership.

Data show that total merchandise trade between India and the U.S. stood at nearly $120 billion in FY24. India's exports to the U.S. amounted to $77.5 billion, and our imports from the U.S. totaled $42.2 billion. Our total trade in services stands at nearly $59 billion. The burgeoning trade flows have solidified the U.S. position as India's largest trading partner and bolstered India's significance as a market for U.S. exports.

The investment landscape presents an equally compelling picture of this deepening alliance. The U.S. has emerged as one of India's most significant sources of FDI, with equity investments totaling nearly $66.7 billion from April 2000 to June 2024. India's market potential, underpinned by its vast consumer base, ongoing economic reforms, and increasingly investment-friendly policies, offers a lot of confidence to U.S. companies from across sectors. Indian companies, too, have been diversifying their operations across the U.S. in many sectors. 

Collaborations across multiple industries highlight the dynamic nature of our partnership. A series of high-level government-to-government agreements have added momentum to this engagement, providing the edifice for the private sector to plan mutually beneficial and balanced partnerships. Whether it is the Initiative on Critical & Emerging Technologies (iCET), the Memorandum of Understanding (MOU) on Semiconductor Supply Chain and Innovation Partnership, the Indo-U.S. Quantum Coordination Mechanism or the India-U.S. Defense Industrial Cooperation Roadmap, each of these offers a plethora of opportunities for both sides to benefit from and leverage mutual strengths for a win-win collaboration. Let us look at a few sectors and the potential on offer. 

Space exploration has emerged as a key focus area for our cooperation. The recent meeting in Houston between senior government officials from the U.S. and India underscored our growing synergy in advancing the space economy, with partnerships ranging from human spaceflight to joint satellite missions. These collaborations will intensify, foster innovation and create opportunities for startups in both nations. The defense-space dialogue has further strengthened cooperation in space situational awareness and satellite-based navigation, positioning both countries as leaders in the rapidly evolving space economy. 

Another area is critical minerals, which have become a cornerstone of the U.S.-India partnership. Recently, both nations signed an MOU, establishing a multi-dimensional collaboration focused on open supply chains for essential materials, technology development, and investment flows to promote green energy. The partnership aims to secure sustainable supplies of vital minerals like lithium and cobalt, critical for clean energy and high-tech industries. 

The MoU prioritizes key areas such as equipment, services, policies, and best practices to facilitate mutually beneficial commercial development in critical minerals exploration, extraction, processing, refining, recycling, and recovery. By focusing on diversifying supply chains through exploration, processing, and recycling, India and the U.S. are reducing dependence on geopolitically sensitive regions and fostering a resilient framework for the global energy transition. 

Similarly, semiconductors have emerged as a critical area of focus, with partnerships leading to establishing advanced chip fabrication facilities in India, producing silicon carbide and gallium nitride chips essential for national security and cutting-edge technologies. These efforts aim to create secure supply chains, cementing the two nations' leadership in modern industry.

Clean energy and sustainability are also prominent areas of collaboration. India's National Green Hydrogen Mission, aimed at establishing leadership in green hydrogen production, aligns naturally with the United States' innovation ecosystems. Joint initiatives in hydrogen technology, electric vehicles, and renewable energy may flourish, driving sustainable energy solutions, job creation, and technological advancement. By integrating capabilities and expertise, India and the U.S. set global benchmarks in sustainable development and energy transition, reinforcing their roles as key players in combating climate change.

Over the years, successive U.S. administrations have fostered a holistic and interconnected cooperation framework with India across these diverse sectors. This partnership strengthens bilateral ties and positions India and the United States as global leaders in innovation, security, and sustainable development. Our two countries are paving the way for a future defined by a commitment to building a resilient and prosperous global economy. We expect this robust partnership to further strengthen under the new administration. 

As global economic paradigms shift, the India-U.S. relationship is a testament to strategic economic alliances' power in driving innovation, growth, and shared prosperity. The coming years will likely see an expansion of cooperation into new frontiers, further cementing the indispensable nature of this bilateral economic relationship that can set new benchmarks for global collaboration.

 

The author is the Director General of the Federation of Indian Chambers of Commerce and Industry (FICCI).

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of  New India Abroad.