Delinking Indo-US Trade And Political Ties A Wise Move By India

The Narendra Modi government has demonstrated sagacity by de-hyphenating trade talks with Indo-US political ties. Refusing to comment on the blocking of the Donald Trump administration’s “Liberation Day” reciprocal tariffs on trading partners by the Manhattan-based Court of International Trade, Union Commerce Minister Piyush Goyal made it clear that the deal with Washington remains “well on track.” This approach reflects a pragmatic understanding of international diplomacy, where economic interests are pursued independent of transient political developments. It is a known fact that Trump’s repeated assertions that he facilitated, if not forced, the cessation of hostilities between India and Pakistan, can hurt Modi is politically.

However, in a move that underscores his focus on long-term national interest over short-term political gain, Modi has chosen not to respond to such otherwise provocative statements. By avoiding a public rebuttal, he has signalled that his administration is more interested in achieving concrete outcomes—such as a favourable trade agreement with the US—than in engaging in a war of words. This restraint not only enhances India’s credibility as a mature global actor but also helps maintain a steady and focused trajectory for Indo-US economic relations.

And, of course, this will surely help Delhi get a good trade deal with Washington, although the situation right now remains fluid. According to the Treasury Secretary Scott Bessent, “It seems highly inappropriate for the judiciary to wade in here when the Senate had the opportunity to override the president and didn't.” A trade deal with the United States is critical for India’s broader economic agenda. Washington remains one of New Delhi’s most important trading partners, and greater access to US markets can provide a much-needed boost to Indian exports, investment flows, and technology collaboration. Ensuring that trade negotiations are insulated from political sensitivities or diplomatic flashpoints allows for more consistent and result-oriented engagement, which is vital for India as it seeks to enhance its global economic footprint. While the current strategy of de-hyphenating trade from overall diplomatic relations can yield immediate advantages, it may not be sustainable in the long term. As the Indo-US partnership deepens and broadens, the interplay between economic, strategic, and political dimensions is likely to grow more complex.

Issues such as intellectual property rights, digital trade regulations, climate commitments, labour standards, and strategic alignment in the Indo-Pacific will increasingly blur the lines between trade and diplomacy. Therefore, in the medium to long term, India might find it necessary to re-hyphenate its trade engagements with the broader Indo-US relationship to leverage comprehensive diplomatic capital. The re-hyphenation should not mean reverting to an overly politicised approach but rather adopting a holistic framework where trade is one of several pillars in a multifaceted strategic partnership.

By aligning trade negotiations with other areas of collaboration like defence, technology, and climate change, India can extract greater value and influence from its relationship with the United States. On that count, the Modi government’s current strategy of separating trade from broader diplomatic issues has been both timely and effective. It has allowed India to keep trade talks on a productive path while sidestepping potentially disruptive political controversies. However, as India’s global ambitions grow and its ties with the United States become more layered, a more integrated approach may be required to harness the full potential of this critical bilateral relationship.