Transactionalism represents a foreign policy approach characterized by direct, issue-specific exchanges between nations, emphasizing immediate and measurable outcomes. This paradigm shift moves away from long-term strategic visions or value-based partnerships, adopting a deal-oriented mindset where both sides seek specific benefits. A notable instance of this approach was seen during Donald Trump’s presidency, which significantly influenced how the US engaged with allies, particularly India.
During Trump’s presidency, his foreign policy was anchored in the "Make America Great Again" (MAGA) economic framework. This perspective framed India not as a long-term strategic partner but rather as a nation expected to reciprocate in various domains such as trade, defense, and technology. The administration's focus shifted from shared democratic values to closing tangible deals that aligned with US interests.
The Trump administration emphasized quick, result-oriented engagements. For example, it sought an expedited resolution of issues like the Civil Liability for Nuclear Damage (CLND) Act, which was crucial for enabling US firms to export small modular reactors (SMRs) to India. Instead of cultivating a broader strategic partnership, the focus remained on resolving specific commercial irritants.
Trump frequently criticized India for maintaining high tariffs on American exports, which included products like Harley-Davidson motorcycles, medical devices, and agricultural goods. He demanded tariff reductions and broader market access for US companies, labeling India’s trade practices as “unacceptable” and “not reciprocal.”
Trump advocated for reciprocal trade measures—if India imposed high tariffs on US products, the US would respond in kind. This strategy aimed to pressure India into lowering its import duties and liberalizing its domestic market, particularly in sectors like e-commerce, pharmaceuticals, and medical technology.
India made minor adjustments to its tariffs and offered limited market access; however, these actions did not meet US expectations. Consequently, in 2019, Trump revoked India’s Generalized System of Preferences (GSP) benefits, which had previously allowed over $5 billion worth of Indian exports to enter the US duty-free.
The withdrawal of GSP benefits led to heightened trade tensions. Trump clearly stated that any further trade discussions would hinge on resolving tariff disputes and ensuring fair access for US businesses. This stance transformed economic ties into a more conditional and less collaborative relationship.
The CLND Act emerged as a significant hurdle in bilateral relations. American companies deemed India’s supplier liability clause too risky. The Trump administration viewed amending this law as vital to unlocking the full potential of the 2008 India-US nuclear deal, making it a critical benchmark for deeper engagement.
Trump did support deeper defence cooperation with India, but on transactional terms. The US backed defence sales involving drones, missile systems, and aircraft, anticipating quicker regulatory approvals and co-production commitments. Additionally, Trump promoted the renegotiation of the decade-long defence agreement originally signed in 2005.
In contrast to the Biden administration, Trump’s team avoided establishing a comprehensive strategic roadmap. India-US relations were assessed based on economic and defence benefits rather than democratic alignment or regional stability. Engagement was conducted on a deal-by-deal basis, lacking an overarching foreign policy doctrine towards India.
Despite the transactional focus, some US policymakers endeavored to forge long-term partnerships through initiatives like iCET (Initiative on Critical and Emerging Technologies) and TRUST (Transforming the Relationship Utilizing Strategic Technology). These initiatives concentrated on areas such as semiconductors, AI, quantum technologies, and defence innovation, hinting at broader ambitions.
In response to this environment, Indian officials adapted from a value-based diplomatic approach to a results-driven model. Traditional appeals to shared values had minimal influence, compelling Indian diplomacy to focus on closing deals, demonstrating policy reforms, and creating commercial opportunities to align with American expectations.
India has learned to navigate a foreign policy landscape where mutual and immediate benefits are paramount. It must remain prepared for future administrations—American or otherwise—that demand short-term outcomes over long-term alignment. Concurrently, India needs to safeguard its autonomy in critical sectors such as agriculture, the digital economy, and healthcare regulation. As stated, “Strategic friendship must be supported by shared interest, not just shared speeches.”
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