The US-India defence relationship, once hailed as a cornerstone of 21st-century strategic cooperation, has entered its most turbulent period since diplomatic ties were established. President Donald Trump's imposition of escalating tariffs on India—now reaching 50% combined with an additional penalty for Russian oil purchases—has fundamentally disrupted what was previously considered a mutually beneficial defence partnership.

This deterioration comes at a critical juncture when India faces mounting security challenges from China and Pakistan, while the US seeks reliable partners in the Indo-Pacific region.

The Collapse of Defence Trade Relations

The most visible manifestation of this relationship breakdown is India's rejection of the F-35 fighter jet deal, which Trump had personally offered during Prime Minister Narendra Modi's February 2025 visit to Washington. Despite earlier joint statements indicating US willingness to review policies on fifth-generation fighters, India has definitively declined the F-35 purchase, citing concerns over operational restrictions and the recent tariff escalations. This decision represents more than a lost sales opportunity—it signals India's fundamental reassessment of US reliability as a defence partner.

The rejection extends beyond fighter aircraft to broader procurement decisions. India has paused its $3.6 billion deal for six additional Boeing P-8I Poseidon maritime patrol aircraft, citing both the 50% price increase since initial negotiations and the punitive tariffs imposed by the Trump administration. This pause particularly stings for US defence manufacturers, as the P-8I has been a flagship program demonstrating successful US-India defence cooperation, with India currently operating 12 such aircraft for maritime surveillance in the Indian Ocean Region.

Strategic Realignment Toward Alternative Partners

India's defence procurement strategy is undergoing rapid diversification in response to US unreliability. The country has strengthened ties with France through a €7.4 billion deal for 26 Rafale Marine fighter jets, which includes technology transfer provisions for indigenous weapons integration and domestic production facilities. This agreement, finalised in April 2025, demonstrates India's pivot toward partners offering greater technological autonomy and fewer political strings.

Similarly, India's defence cooperation with Israel has expanded significantly, with Israeli arms imports increasing by 175% over the past eight years. The partnership includes joint development of the Barak-8 missile system and extensive cooperation in UAV technology, cybersecurity, and electronic warfare systems. Israel's willingness to provide source code access and integrate Indian-developed weapons systems stands in stark contrast to US restrictions on the F-35 program.

Russia's Enduring Influence Despite Western Pressure

Despite Western sanctions and US pressure, India continues its substantial defence relationship with Russia, which remains the country's largest defence supplier at 36% of total imports. The relationship encompasses ongoing projects including S-400 air defence systems, BrahMos missile development, and potential future cooperation on the Su-57E stealth fighter. Russia's unprecedented offer to provide full source code access for the Su-57E represents exactly the kind of technological partnership that the US has been unwilling to extend with the F-35.

India's continued purchase of Russian oil, reaching 1.75 million barrels daily in the first half of 2025, demonstrates its commitment to strategic autonomy despite US economic pressure. This energy relationship, worth $52 billion annually, provides Russia with crucial revenue while offering India affordable energy supplies for its growing economy.

The Pakistan Factor In US Strategy

Trump's simultaneous outreach to Pakistan has added insult to injury in US-India relations. The unprecedented meeting between Trump and Pakistan's Army Chief Field Marshal Asim Munir, lasting over two hours at the White House, signals a dramatic shift in regional priorities. Pakistan's acknowledgment of US mediation in the May 2025 India-Pakistan ceasefire—which India vehemently denies—has created additional friction in US-India ties.

The emerging US-Pakistan defence cooperation, including discussions of a potential 40-year strategic defence agreement, represents a fundamental realignment that directly challenges India's regional security interests. Pakistan's military integration with China through initiatives like CENTAIC (Centre for Artificial Intelligence and Computing) already poses significant challenges to India's security calculus.

Economic And Strategic Implications

The trade war's impact extends beyond defence procurement to broader economic relations. India's exports to the US, worth $64 billion annually and representing 2% of GDP, face severe competitiveness challenges under the 50% tariff regime. The defence sector, which had seen growing integration with US supply chains and technology transfers, now faces fundamental restructuring as India seeks alternative partners.

India's "Make in India" initiative, designed to promote domestic defence manufacturing, is being accelerated in response to supply chain vulnerabilities exposed by US policy volatility. The country's defence production increased 174% to ₹1.27 lakh crore in FY 2023-24, with 92% of new contracts going to domestic industry. This indigenisation drive, while strategically beneficial for long-term self-reliance, represents a lost opportunity for US-India industrial cooperation.

Looking Forward: Alternative Partnerships And Strategic Implications

India's defence diversification strategy now focuses on European partners offering greater technological cooperation without political conditionalities. Sweden, Germany, Italy, and other European nations are being evaluated as alternatives to traditional suppliers. These countries often separate defence commerce from geopolitical agendas and offer more flexible terms for technology transfer and co-development.

The shift also accelerates India's indigenous defence capabilities development. The country aims to achieve ₹3 lakh crore in defence production and ₹50,000 crore in defence exports by 2029, reducing dependence on foreign suppliers while building domestic industrial capacity.

Summary

The US-India defence relationship's current trajectory represents a strategic miscalculation that serves neither country's long-term interests. Trump's tariff-centric approach has sacrificed decades of carefully built trust and cooperation for short-term economic gains. For India, the crisis has accelerated defence diversification and indigenous capabilities development, potentially reducing future dependence on any single supplier.

The broader implications extend beyond bilateral relations to regional security architecture and global defence trade patterns. As India pivots toward alternative partners and domestic production, the US loses a crucial ally in balancing China's rise while potentially driving India closer to Russia despite Western sanctions. The defence partnership's breakdown illustrates the dangers of mixing economic policy with strategic cooperation, particularly when dealing with proud, independent nations like India that prioritise sovereign decision-making over external pressure.

IDN