Twenty years ago this month, India and Pakistan tested nuclear weapons, triggering panic attacks in foreign capitals across the globe. Up until that time, India and America didn’t always have much to say to each other. Former U.S. Ambassador to India Frank Wisner has recounted how in the mid-1990s, a trade dispute over almonds managed to qualify as the only topic of strategic significance when the leaders lunched. India’s nuclear tests, despite first provoking outrage, led to lengthy strategic talks that began to change this sleepy dynamic. Indian leaders were tickled pink by the effective legitimation of their nuclear program (in contrast to Pakistan’s) in a historic deal under the Bush administration in 2005-2006, which not only offered India access to U.S. nuclear fuel in exchange for stronger safeguards on its bomb, but stipulated that India would keep its atomic arsenal and be able to produce weapons-grade material.

But for all the remarkable changes the deal enabled, it hasn’t quite lived up to great expectations. As a recent U.S. ambassador to India acknowledged, the relationship has been “slightly underperforming” for decades.   

Like its predecessors, the Trump Administration appropriately sees India as a linchpin of its free and open Indo-Pacific strategy for Asia and a leading world power.  But the hard reality is that Washington’s expectations don’t always line up with India’s current military, diplomatic, and economic circumstances. Unless the partners can pick up the pace in response to tectonic regional and global power shifts, the grand partnership imagined in the early aughts will fall short.   


While progress towards increased nuclear energy output lagged due to U.S. companies’ fear of exposure under India’s liability law, the nuclear accord’s most substantial returns can be found in the steady uptick in two-way cooperation on defense, counterterrorism, and intelligence-sharing. Today, India lies at the center of a rare bipartisan consensus that its rise as a global power lies in America’s interests. 

But despite the near-unanimity of India’s importance as a strategic partner, in recent years, Russian military hardware has still constituted 62 percent of India’s total arms imports. According to the terms of the Countering America’s Adversaries Through Sanctions Act, which requires penalizing any country engaging in “significant transactions” with Russia’s defense and intelligence sectors, sanctions aimed at Russia could regrettably wind up punishing India as well.

Prime Minister Narendra Modi has invested considerable time and energy in building bridges overseas, including Washington. But India’s capacity to implement security policies is constrained: as of August 2016, India had fewer foreign service officers than Singapore, and the bulk of the defense ministry’s budget today is sucked up by personnel and pension expenses that have crowded-out defense modernization. 

Despite these obstacles, skyrocketing U.S. defense sales, a growing number of bilateral and trilateral meetings and maritime exercises, the revival of the so-called “quadrilateral” U.S.-Japan-India-Australia democratic security grouping, and India’s gradually increasing engagement with Southeast Asia (exemplified by Modi hosting a leaders summit with the ten countries this January) all point towards an emerging role for India as a net security provider in Asia and the Indian Ocean. 

If the U.S. envisions India as a valuable partner to keep the Indo-Pacific free and open—as it seems to and should—it needs to address the gap between ambition and reality. India’s capacity to lead in the Indian Ocean should be atop the to-do list, as countries in India’s neighborhood test the limits of their maneuverability with China as never before. 

What that means, practically, is adding real teeth to India’s recent designation as a “major defense partner” for military sales to allow it access to the best American equipment. Right now, India’s ability to take advantage of U.S. security technology is being held up by delays in formalizing the so-called Communications, Compatibility and Security Agreement (COMCASA) and the Basic Exchange and Cooperation Agreement (BECA).  COMCASA allows for installing encrypted and secure communications systems on the equipment sold to India while BECA enables sharing of geospatial intelligence for situational awareness. Addressing Indian leaders’ concern that the agreements might limit their autonomy, and completing the transactions, would go a long way towards increasing Indian readiness.  Meanwhile, building teamwork between the quad partners will help them preserve freedom of navigation as China gets pushy over who owns which island, and so forth. India, for example, has recently begun to focus attention on the underserved Bay of Bengal region, which remains strategically significant due to its trade-heavy positioning between the Indian and Pacific Oceans, as well as the presence of populous and fast-growing economies like Myanmar and Bangladesh.

India’s economic challenges, and the serious underperformance of the U.S.-Indian trade partnership, also contribute to a ceiling, for now, on the country’s capacity to exert influence abroad. Bangalore’s impressive IT centers mask significant domestic obstacles like underemployment, undereducation, inequality, and a limited defense-industrial base. Two-way trade last year was over $125 billion—roughly a ten-fold increase over 1998.  It sounds impressive, until you realize it’s over five times less than U.S.-China trade in 2017.  To put things in further perspective, U.S.-South Korea trade well-exceeded the volume of U.S.-India trade in 2017, despite South Korea’s smaller economy. 

Modi has embarked on meaningful domestic reforms to improve business conditions, reduce red tape, skill workers, and attract record foreign investment. But that reformist zeal has steadily eroded as the government enters the fifth and final year of its first term.  More fundamentally, India remains closed in key respects to international trade—and is headed further down this path. 

The country runs its own sizeable trade deficit with China.  Earlier this year, its government announced tariffs on almost fifty product groups.  These wholesale duties were reportedly the first in a generation. Instead of building up exports and competing globally, New Delhi is constructing a wall against imports—not unlike the U.S. at present, given the tariffs the current administration proposes to level against China and has already imposed on steel and aluminum imports.

The short-term challenge for both countries is clear: find ways to bridge the distance between Modi’s “Make In India” initiative with President Donald Trump’s “America First” policies.  Both programs are intended to spark local manufacturing and job creation through old-school, managed trade schemes. 

As India and America enter election seasons, latent trade tensions and Indian anxiety over a possible curtailment of high-skilled visas threaten to expose an underlying fragility in the relationship. Not that long ago, in 2013-2014, relations stalled for months over U.S. trade concerns and India’s annoyance over the arrest of a consular official in New York. Currently, an inward-focused, transactional White House is in no mood to practice strategic altruism and play the long game.  Trump will likely want India to open its markets to trade sooner than it is ready. 

As the administration moves towards postponed cabinet-level conversations between the State and Defense Departments and their Indian counterparts, now that Mike Pompeo has been confirmed as Secretary of State, that discussion needs to move beyond the modern-day equivalent of ‘90s almond talks.

This moment might not be the right one for a big, bold idea like a free trade agreement or even the announcement of long-delayed discussions about bilateral investment rules. But messy domestic politics in either country shouldn’t be an impediment to, at the very least, preliminary efforts – like finding more ways to nurture talented, job-creating small business entrepreneurs and revisiting education and worker training plans – that pull in the private sectors. And while, unlike China, neither the U.S. nor India can simply throw money at infrastructure development across Asia, the pair do have a comparative advantage in laying the related groundwork—like “soft infrastructure” in the form of sound governance, the rule of law, and bureaucratic capacity-building. 

At a time when the United States is retreating, China’s rising, and transatlantic tensions are growing minute-by-minute, the stakes are high. India and America have come a long way in a short time. But having picked the low-hanging fruit from the symbolic centerpiece of a nuclear deal, now the most intriguing U.S. partnership of the 21st century needs to live up to its profound potential.