USA Tariff on Copper and Pharmaceuticals

President Trump announced a 50% tariff on copper imports and threatened up to 200% tariffs on pharmaceutical imports during a cabinet meeting on July 8, 2025. This aims to bolster domestic production but raises concern over trade tensions and price inflation

India–US Relations

Evolution of India–US Relations

• Cold War Era Divergence
  • India pursued a policy of Non-Alignment, while the United States aligned more closely with Pakistan as a strategic partner in South Asia.
  • Bilateral ties remained limited due to ideological differences and geopolitical rivalry during the bipolar world order.
• Post-Cold War Engagement
  • With the end of the Cold War and India’s economic liberalization in 1991, diplomatic engagement between the two countries expanded significantly.
  • The 2005 Civil Nuclear Agreement marked a transformational moment, enabling India to access civil nuclear technology and formalizing strategic cooperation.
• Strategic and Defence Agreements Signed
  • LEMOA (2016): Enabled reciprocal logistics support between armed forces.
  • COMCASA (2018): Facilitated encrypted communication and equipment interoperability.
  • BECA (2020): Enabled real-time geospatial intelligence and navigation data sharing.
  • GSOMIA (2002): Allowed the secure exchange of classified military information.

Significance of Bilateral Relations

• Economic Engagement
  • The United States was India’s second-largest trading partner in 2023.
  • Bilateral trade witnessed a 72% increase between 2017–18 and 2022–23.
  • Sectors involved: pharmaceuticals, defence, IT services, energy, and agriculture.
• Defence Cooperation
  • India was designated as a “Major Defense Partner” in 2016.
  • Joint military exercises include YudhAbhyas, Malabar, and Tiger Triumph (first tri-service).
  • US companies have collaborated in co-developing critical defence platforms with Indian manufacturers.
• Technological and Innovation Collaboration
  • Launch of India–US Initiative on Critical and Emerging Technology (iCET) in 2023.
  • Focus areas: AI, quantum computing, semiconductors, 5G, space, and cybersecurity.
  • Establishment of INDUS-X to link defence startups, academia, and investors across both nations.
• Cultural and Educational Ties
  • Over 200,000 Indian students are studying in the US.
  • The Indian-American diaspora exceeds 4 million, strengthening people-to-people connections.
  • Academic collaborations between major institutions enhance mutual understanding.
• Climate and Clean Energy Cooperation
  • India and the US are partners in the Clean Energy Agenda 2030.
  • Joint commitments under Mission Innovation and cooperation on green hydrogen, solar, and biofuels.
• Multilateral and Strategic Cooperation
  • Both countries are members of QUAD, advocating a free, open, and rules-based Indo-Pacific.
  • Cooperation includes vaccine diplomacy, maritime domain awareness, infrastructure development, and cybersecurity.

Recent Developments and Forthcoming Initiatives

• Security of Supply Arrangement (SOSA): Aims to ensure stable and predictable defence equipment supply from the US to India.
• Reciprocal Defence Procurement (RDP) Agreement: To improve market access for Indian defence manufacturers and streamline acquisition procedures.
• Joint Production Initiatives: Includes collaboration on Stryker Armoured Vehicles and GE-F414 fighter jet engines.
• Public–Private Innovation Partnerships: Establishment of joint innovation funds and incubators under DARPA and Defense Innovation Unit (DIU).
• Streamlining Export Controls and Licensing: India’s STA-1 status aids faster access to controlled defence technologies.
  Bilateral dialogue is ongoing to ease ITAR and EAR

Challenges in India–US Relations

• Trade Imbalances and Tariff Disputes: Contentions over agricultural subsidies and tariffs on steel/aluminium persist.
• Data Privacy and Localization: The US prefers free data flow, while India advocates data localization under its Data Protection Law.
• Defence Procurement Delays: Complex regulatory procedures and pricing concerns slow execution of deals, e.g., MQ-9B drone acquisition.
• Visa and Immigration Policies: Restrictions on H-1B visas affect Indian IT professionals and cross-border talent mobility.
• Geopolitical Divergences: Differences over policies on Russia, Iran, and Afghanistan sometimes lead to strategic divergence.

Way Forward

• Resolving Trade Barriers: Negotiating reduced tariffs and increasing market access for both sides.
• Enhancing Technology and Cyber Cooperation: Creating a Cybersecurity Forum and harmonizing data protection standards.
• Streamlining Defence Procurement: Strengthening frameworks like the Defense Technology and Trade Initiative (DTTI).
• Relaxation in Visa Policies: Enhancing access to H-1B visas for Indian tech professionals.
• Strengthening Multilateral Engagements: Expanding cooperation in Indo-Pacific security, counter-terrorism, and global rule-making in AI and space.