On April 21, 2025, U.S. Vice President JD Vance arrived at the Param Air Force Station in Delhi for a four-day visit to India, marking a critical moment in India-U.S. relations.
High-risk diplomatic missions
On April 21, 2025, U.S. Vice President JD Vance arrived at the Param Air Force Station in Delhi for a four-day visit to India, marking a critical moment in India-U.S. relations. His itinerary integrates diplomatic and cultural engagement, including meetings with Prime Minister Narendra Modi and visiting Swaminarayan Akshardham Temple in Delhi, Amer Fort in Jaipur, Jantar Mantar, City City Palace, Hawa Mahal and Taj Mahal in Agra.
The mix of advanced negotiations and cultural exploration highlights the multifaceted partnership between the two countries, which is increasingly important for a world struggling with trade uncertainty.
The core of the visit: Trade negotiations
The core of Vance’s visit is the pursuit of bilateral trade agreements. In 2024, trade between India and the United States reached an impressive $129.2 billion, with India exporting $87.4 billion worth of goods to the United States, including textiles, pharmaceuticals and engineering products. This economic relationship is the lifeline of millions of Indian workers and businesses. But the potential re-imposition of the U.S. tariffs on 26% could undermine the process. Such tariffs will make Indian goods more expensive for American consumers, potentially reducing demand and forcing businesses to seek alternative markets.
Local influences in India
The threat of tariffs has attracted attention from the entire Indian state. In Andhra Pradesh, Chief Minister N Chandrababu Naidu openly demands exemption from shrimp exports, a key industry supporting thousands of livelihoods. Similarly, Karnataka, a powerful country in technology, manufacturing and agriculture, faces significant risks. The state’s textile and engineering commodities industry relies heavily on the U.S. market and may be less competitive if tariffs increase costs. Karnataka’s agricultural exports, such as coffee and spices, may also have difficulty maintaining their foothold in the United States. Instead, successful trade agreements can unlock new opportunities, attract investment and promote Karnataka’s role as a global economic hub.
Economic interests of Karnataka
Karnataka’s diversified economy makes it particularly sensitive to global trade shifts. The IT industry in states centered around Bangalore may not be directly affected by tariffs, but its manufacturing and agricultural sectors are vulnerable. For example, Karnataka, which employs thousands of homes, may face higher costs and reduce U.S. demand. Small and medium-sized businesses are the backbone of the state’s economy and may struggle to absorb these shocks, leading to unemployment and an economic slowdown. On the other hand, a favorable trade agreement could strengthen Karnataka’s position, encouraging U.S. companies to invest in their technology and manufacturing industries, create jobs and promote innovation.
China’s shadow in trade negotiations
The trade agreement reached between India and the United States has aroused sharp criticism from China, a major player in global trade. Beijing provides affordable goods in South Asia, fearing that the Indian-U.S. agreement could undermine its economic impact. China warned of countermeasures, adding to the ghost of wider trade conflict. This creates a complex geopolitical landscape where smaller economies, including those in South Asia, may fall into a firefight. India must carefully drive these tensions, balance its economic ambitions, and needs to maintain stable relations with China.
Global economic uncertainty
The background of Vance visit is a world struggling with economic uncertainty. Recent money market volatility highlights this vulnerability. The dollar has been weakened by major currencies such as the Swiss franc, the yen and the euro, driven by concerns about the politicization of the U.S. Federal Reserve. This erosion of investor confidence emphasizes the delicate interaction between economic policy and political perception. Meanwhile, the upcoming economic report will provide key insights. The Federal Reserve’s “Beige Book”, “Purchasing Managers in Europe and Japan” index, the company’s financial performance will illustrate the health of the global economy.
The IMF’s Sober Prospects
The International Monetary Fund (IMF) spring meeting will further shape the narrative with the release of its world economic outlook. IMF Managing Director Kristalina Georgieva said the report could include an upward adjustment to global growth forecasts and inflation forecasts. These revisions reflect the challenges of prolonging economic uncertainty caused by trade barriers and supply chain disruptions. Georgieva’s warning about the dangers of protectionism is particularly relevant to Vance’s visit, as tariffs may exacerbate these issues.
The risks of protectionism
Georgieva stressed that modern supply chains are closely linked, meaning that tariffs on a product may span across industries and countries. For example, tariffs on Indian textiles could increase costs for U.S. retailers, raise prices for consumers and disrupt supply chains in third countries. Small economies, such as those in South Asia, are particularly vulnerable because they often lack the resources to absorb this shock. Furthermore, trade protectionist measures can undermine long-term productivity by blocking innovation and competition. While tariffs are designed to boost domestic manufacturing, the transition is slow, making consumers more expensive and fewer choices.
A broader meaning
Vance’s visit was at a time when global transactions were at a crossroads. The rise of trade protectionism, coupled with geopolitical tensions, threatens the destruction of the global economy. For India, the main players in the global south, the bet is high. A strong trade deal with the United States could enhance India’s economic resilience, create jobs and position it as a balance of Chinese dominance. However, failure to ensure favorable provisions could undermine India’s export-driven industry and harm its economy. The results of the Vance discussion will also influence the global view of U.S. trade policy under the current administration.
The way forward
When JD Vance set out from Jaipur on April 24, 2025, his talks with Indian leaders will far exceed those of two countries. Successful trade agreements can strengthen India-US ties, boost economic growth, and create opportunities for states such as Karnataka. But the broader challenge lies in driving the global trade landscape. Avoiding the pitfalls of protectionism and promoting international cooperation will require strategic diplomacy and commitment to mutual benefit. For India, the United States and the world, the road ahead requires careful navigation of these turbulent trade winds. ———- EOM
(The author of this article Girish Linganna is an award-winning science writer and a defense, aerospace and political analyst based in Bangalore. He is also the director of Add Engineering Components for Add Engineering Components, India, Pvt. Ltd.
