India-US ties: Building bridges of trade, talent
The India-US partnership is not fragile; it is anchored in shared values, security interests, and deep people-to-people ties
The US-India relationship has never been about transactions. It has been about compounding trust built through people, trade, and shared values. That is why the Trump administration’s tariffs on Indian exports to the US and the imposition of a $100,000 fee on new H-1B visas matter more than their price tags. One targets products, the other people, but both stem from the same narrative that the Indo-US relationship is “one-sided”.
Together, they threaten to turn what has been one of the world’s most promising partnerships into a ledger of grievances. For India, which sends both the largest pool of H-1B applicants and one of America’s fastest-growing export markets, these moves carry disproportionate weight. For the US, which depends on Indian talent and markets alike, they risk undermining its own strategic advantage.
Indians accounted for 71% of H-1B approvals last year, and over 331,000 Indian students are enrolled in US universities, many hoping to make the leap from classrooms to companies. A $100,000 fee at the entry point is not reform but a toll on ambition. The arithmetic is punishing: With median H-1B wages around $108,000, adding the new toll raises first-year hiring costs by 77%. Startups, labs, and smaller firms cannot absorb this the way large incumbents can. The result is a bias against innovation and a push for talent to seek friendlier destinations such as Canada, the UK, or Germany.
Beyond economics, the fee undercuts the principles that once defined America’s high-skill immigration system: predictability, a market test, and national interest over national origin. By replacing transparency with discretion and merit with money, the US risks corroding the trust that made it a global magnet for talent.
The tariff front is no less jarring. Trump’s charge of a “one-sided relationship” rests on a narrow reading of goods trade. The imposition of 50% duties on Indian products, even higher than on China, was justified by US President Trump in his post on Trust Social on the grounds of “India sells us massive amounts of goods, their biggest ‘client’, but we sell them very little – until now, a totally one-sided relationship, and it has been for many decades.”
What’s true is that in 2024 the US registered a $45.8 billion deficit with India. But this snapshot misses the broader picture. Once services, intellectual property, investment flows, and corporate earnings are included, the US actually enjoys an overall commercial surplus of $35-40 billion. American tech giants alone earn $15-20 billion annually from India’s digital economy, while US financial firms collect billions more in fees. Add in tuition from Indian students, and the supposed “imbalance” disappears.
Indian companies, meanwhile, have invested over $40 billion in the US and created more than 425,000 jobs. Aircraft orders from Indian carriers are vital to Boeing’s books. Far from being one-sided, the trade and investment relationship is deeply reciprocal.
When placed side by side, the toll on visas and the tariff wall on goods send conflicting signals. Washington urges India to be a democratic counterweight to China in the Indo-Pacific, yet penalises it more harshly than Beijing. Tariffs are seen in New Delhi not as trade correction but as coercion, especially on issues such as Russian oil imports. But US and European firms themselves continue billions in trade with Russia in critical materials, making the charge seem hollow. At the same time, the H-1B hike directly undermines the very people-to-people ties that have long anchored trust. Indian talent has been the backbone of Silicon Valley’s growth; Indian students inject billions into US campuses. Cutting off this flow undercuts America’s own innovation ecosystem.
History shows US-India ties have survived worse. Sanctions after India’s 1998 nuclear tests were lifted within three years. The 2008 civil-nuclear deal reset the relationship and opened new strategic pathways. Today, defence and technology cooperation is deeper than ever: India’s dependence on Russian arms has fallen from 75% to 35% in a decade, while it has signed over $12 billion in US defence contracts since 2020.
Both governments understand that short-term turbulence should not derail long-term convergence. Institutions on both sides are working to insulate defence, technology, and space cooperation from tariff-driven politics. The challenge is ensuring that political soundbites do not overshadow structural realities.
Industry and academia have a role in steadying the arc. US firms could form fee-offset consortia to support startup hiring. Visa fees could be tied to funding US worker training, reviving earlier reformist principles instead of blunt tolls. Universities and companies should expand apprenticeships and co-ops that turn student flows into pipelines of two-way talent.
On trade, both sides can broaden engagement beyond goods-into services, investment, digital economy rules, and supply chain resilience. Recognising the full commercial picture, not just a narrow deficit, is essential.
The India-US partnership is not fragile; it is anchored in shared values, security interests, and deep people-to-people ties. But it is not immune to shortsighted policies. Tolls on visas and tariffs on goods may win applause in poll season, but they erode the trust underpinning long-term strength. The choice is stark: Build walls of cost and suspicion, or build bridges of talent and trade. If the US chooses the former, others will step in. If it chooses the latter, both countries will rise together, not despite turbulence but through it.
Lloyd Mathias is a business strategist and an independent director and tweets as @LloydMathias. The views expressed are personal
