Beyond the Headlines: Navigating the Promise and Peril of the U.S.-India Tech Alliance 

The U.S.-India technology partnership represents a critical strategic alignment driven by shared goals of countering China’s influence and securing supply chains, yet it remains hampered by persistent friction. While bilateral trade has soared to over $212 billion, fueled by 900% growth in semiconductor trade, and initiatives like the TRUST agreement aim to co-develop AI and quantum technologies, the relationship is strained by a tariff war, stalled trade negotiations, and fundamental disagreements over defense technology transfer, such as the F-35 impasse where India demands full tech autonomy. For the partnership to move beyond cyclical disputes and fulfill its potential as a pillar of 21st-century tech security, both nations must decouple trade from geopolitical leverage, embrace genuine co-development models, and the U.S. must accept India’s multi-aligned foreign policy, making collaboration the most compelling choice for New Delhi’s technological future.

Beyond the Headlines: Navigating the Promise and Peril of the U.S.-India Tech Alliance 

The U.S.-India relationship is a study in stark contrasts and complex interdependence. On one hand, government officials hail a “defining partnership of the 21st century” as they launch ambitious initiatives like TRUST (Transforming the Relationship Utilizing Strategic Technology). On the other, strategic experts warn that bilateral ties are at their lowest point in 25 years, strained by punitive tariffs and deep political mistrust. This paradox lies at the heart of one of the world’s most consequential geopolitical relationships. As both nations seek to counterbalance China’s influence and secure their technological futures, their ability to transform soaring ambitions into tangible, mutually beneficial outcomes faces its most significant test. 

A Partnership Forged in Shared Ambition 

The strategic logic for a deep U.S.-India partnership is compelling. For American policymakers, a strong, aligned India is viewed as essential for maintaining a stable balance of power in the Indo-Pacific. For India, collaboration with the U.S. offers a pathway to technological advancement, economic growth, and enhanced global status. 

This shared vision has catalyzed remarkable growth across several key areas: 

• Exploding Trade: Two-way trade has skyrocketed, reaching over $212 billion in 2024, nearly four times the 2008 figure. Much of this growth is in advanced technology: between 2008 and 2024, trade in semiconductor products surged by over 900%, pharmaceutical trade by 766%, and ICT trade by 233%. 

• Deepening Investment: U.S. tech giants like Google, Meta, Microsoft, and Micron have invested billions in India’s cloud computing, AI, and semiconductor sectors. Bilateral foreign direct investment flows have grown at an average of 11% annually since 2004. 

• Structured Cooperation: Successive administrations have built frameworks for collaboration. The Initiative on Critical and Emerging Technology (iCET), launched in 2022, was re-energized in 2025 as the TRUST initiative, focusing on co-development in AI, quantum computing, semiconductors, and space. 

The following table summarizes the key sectors and recent milestones of the strategic technology partnership: 

The Persistent Roadblocks: Where Ambition Meets Reality 

Despite this impressive architecture of cooperation, the partnership remains fragile. Experts note the absence of strong “political champions” in both capitals to drive the relationship forward. Several entrenched issues create persistent friction: 

• The Tariff War and Stalled Trade Deal: The U.S. has long criticized India’s high tariffs, with one administration raising the effective tariff rate on Indian imports to 50% in August 2025. Although both sides have aimed to finalize a trade deal, negotiations have repeatedly stalled. A major point of contention has been U.S. pressure for concessions in India’s politically sensitive agricultural sector. The lack of a “mini trade deal” has left businesses in limbo and tariffs in place, undermining the broader strategic goodwill. 

• The Defense Technology Impasse: Perhaps the most symbolic rupture concerns defense technology transfer, exemplified by the F-35 fighter jet controversy. The U.S. saw offering the F-35 as a strategic “umbilical cord” to deepen ties, but India demanded meaningful technology transfer, source code access, and the ability to integrate its own weapons systems. The U.S., constrained by its export control laws, was unwilling to provide such access, leading to a stalemate. An Indian official summarized the view from New Delhi: “Without those keys, there is no deal”. This episode highlighted a fundamental clash: the U.S. model of controlled alliances versus India’s unwavering commitment to strategic autonomy. 

• The Russia Factor: India’s long-standing defense and energy relationship with Russia remains a major irritant. Despite U.S. pressure, India has proceeded with its $5.5 billion S-400 air defense system purchase from Russia. Furthermore, India’s imports of discounted Russian oil have been a direct trigger for U.S. tariff hikes. While India has recently diversified its oil imports, boosting purchases from the U.S., its willingness to engage with Russia—including hosting President Putin—signals that it will not be bullied into aligning with any single power bloc. 

The Path Forward: From Transactional Friction to Foundational Trust 

For the U.S.-India technology partnership to fulfill its potential, both nations must move beyond cyclical friction and build a more resilient foundation. 

• Decoupling Trade from Geopolitical Leverage: The U.S. must reconsider using tariffs and trade deals as blunt instruments to force geopolitical compliance, particularly on issues like relations with Russia. As one analyst notes, this approach has pushed India to demonstrate it “is not going to be bullied“. A pragmatic trade agreement that lowers barriers for sectors like technology, pharmaceuticals, and energy—de-linked from maximalist geopolitical demands—would build much-needed trust. 

• Embracing a New Model of “Co-Development”: The future lies in moving beyond a simple buyer-seller or outsourcer relationship. Initiatives like INDUS-X, which links both countries’ defense innovation ecosystems, point the way forward. The focus should be on joint innovation, such as the co-development of unmanned systems or AI for maritime domain awareness, where both parties contribute and own the intellectual property. 

• Acknowledging India’s Multi-Alignment: The U.S. needs to accept that India will maintain a “diversified portfolio of partners“. The goal should not be to replace India’s ties with Russia or others, but to make collaboration with the U.S. so technologically and economically compelling that it naturally becomes New Delhi’s partner of first resort for critical future technologies. 

In conclusion, the U.S.-India technology partnership stands at a critical juncture. The grand declarations and initiatives have created a high ceiling for collaboration, but the floor is cracking under the weight of transactional disputes and mutual suspicion. The relationship’s success will not be determined by the volume of diplomatic communiques, but by the ability to translate shared strategic rhetoric into tangible, everyday cooperation that benefits industries and innovators in both countries. The choice is clear: continue a cycle of friction that benefits neither, or forge a path of pragmatic co-creation that can help shape the technological landscape of the coming century.