The recent imposition of tariffs and penalties on India by US President Donald Trump has created significant uncertainty and a chilling effect over potential US arms deals in India, complicating an already evolving strategic defence partnership between the two nations.

The announcement of a 25% tariff on Indian goods, alongside a yet-to-be quantified penalty linked to India’s purchase of Russian oil and arms, has disrupted ongoing and prospective multi-billion-dollar defence contracts and prompted India to temporarily pause approvals on key US defence procurements until tensions ease.

India’s defence acquisitions increasingly prioritise the ‘Make in India’ policy, requiring foreign companies to partner with Indian firms and manufacture locally. This policy marks a strategic shift to foster domestic defence production capabilities.

Against this backdrop, there remain significant US-India projects on the table but now clouded by the tariff-induced tensions. The Indian Air Force (IAF) is considering a major tender to procure and manufacture 114 multi-role fighter jets, with Boeing and Lockheed Martin as primary contenders. Such a deal would entail relocating production lines to India and involve investments worth billions.

In addition, key US defence equipment are in advanced stages of negotiation or delivery:

India plans to acquire six additional Boeing P-8I long-range maritime surveillance aircraft, vital for anti-submarine warfare and monitoring contested borders. The contract is near finalization following agreement during Modi-Trump meetings. India had already procured 12 earlier units.

The Indian Army is evaluating the Stryker armoured fighting vehicle, including amphibious variants with integrated Javelin anti-tank missiles. The US is proposing to create a global Stryker manufacturing base in India. Demonstrations for the Indian Army are expected this year amid projected large-scale infantry vehicle needs.

Discussions are underway for co-production of the Javelin missile system in India, involving Bharat Dynamics Limited and US firms Raytheon and Lockheed Martin under long-term partnership agreements.

Lockheed Martin and TATA Advanced Systems Limited jointly bid to manufacture 80 C-130J special operations aircraft in India. TATA Lockheed Martin Aero-Structures Limited already operates a Hyderabad facility contributing to the global C-130J production chain.

For rotary-wing platforms, the Indian Army may procure 11 additional Boeing Apache AH-64E attack helicopters, while the IAF is looking to expand its Chinook heavy-lift helicopter fleet.

Beyond these existing platforms, the Trump administration has offered to sell India F-35 stealth fighter jets, an elite and cutting-edge aircraft granted to very few nations.

However, this offer remains at the proposal stage with no formal agreement yet and faces operational and political hurdles, including India’s current use of Russian S-400 air defence systems and the strategic necessity to maintain operational sovereignty over the jets.

The combined impact of Trump’s tariffs and penalties has cast a shadow over these defence deals by creating diplomatic strains and fostering caution within New Delhi. Indian officials are studying the implications carefully, delaying decisions on major deals while balancing the desire to deepen defence collaboration with the US against strategic autonomy and economic repercussions.

The US-India defence relationship, though robust and growing through initiatives such as the ‘COMPACT’ arrangement aimed to accelerate military partnership and technology transfers, currently faces challenges from the contentious trade measures.

While the US remains a key defence partner for India with several ambitious joint manufacturing and procurement projects underway or proposed, President Trump’s tariffs and penalties have complicated progress on these deals, leading to a cautious pause in approvals and introducing uncertainty about the near-term future of US arms sales and manufacturing partnerships in India.

Based On The Tribune Report