As the global geopolitical canvas undergoes tectonic shifts in 2025, the India-U.S. relationship has emerged not merely as a bilateral engagement but as a pivotal axis of strategic bargaining. The liberal international order, once steered by transatlantic consensus, is steadily ceding space to fragmented multilateralism. Regional assertiveness, techno-nationalism, and economic protectionism are redefining diplomatic behaviour. Traditional alliances are struggling to retain coherence while emerging partnerships are shaped more by pragmatism than ideological kinship. Against this backdrop, India is forging a distinct path that harmonizes national ambition with principled autonomy. For the United States, India represents not only a regional power in South Asia but a key node in the Indo-Pacific strategy and a reliable partner in securing resilient supply chains and democratic technology standards. This evolving partnership exemplifies the strategic art of bargaining in a world increasingly divided by power asymmetries and normative fragmentation.

Strategic Convergence in a Time of Global Disruption

Advertisement

The past eighteen months have seen a marked intensification of Indo-U.S. engagement across domains. Prime Minister Narendra Modi’s 2023 state visit to Washington marked a diplomatic high point, institutionalising cooperation through the Initiative on Critical and Emerging Technologies (iCET). This framework has evolved into a bedrock of bilateral strategic convergence, extending far beyond defence sales to encompass co-development in frontier sectors like AI governance, space innovation, and quantum resilience. The recent 2+2 Ministerial Dialogue in early 2025 reaffirmed these priorities, reflecting mutual consensus on defending a free and rules-based Indo-Pacific, countering China’s aggressive posturing, and preserving open sea lanes.

The iCET’s operationalisation is most visible in the defence sector. The General Electric and HAL collaboration on F414 jet engine co-production, facilitated by rare U.S. technology transfer, signifies an epochal shift from transactional purchases to industrial co-creation. This development not only bolsters India’s indigenous fighter jet program but aligns with the ‘Aatmanirbhar Bharat’ narrative of self-reliance. From a foreign policy lens, it showcases India’s capacity to extract strategic concessions while avoiding entanglement, validating its growing leverage in the evolving global hierarchy. Such tactical manoeuvring defines India’s mastery of strategic bargaining.

India’s Energy Realism and West Asian Outreach

Despite its enhanced partnership with Washington, New Delhi has consistently prioritized energy security and regional strategic depth. India remains the second-largest importer of Russian crude oil, purchasing over 1.8 million barrels per day in early 2025, reflecting a surge of nearly 85 percent since 2022. The new long-term agreement with Rosneft underscores India’s commitment to ensuring supply stability, insulating itself from market volatility and Western secondary sanctions.

Parallelly, India’s engagement with Iran has deepened. The 10-year agreement on Chabahar Port expansion signed in early 2025 enables not only access to Afghanistan and Central Asia but reinforces India’s strategic autonomy in defiance of U.S. concerns. Furthermore, India’s proactive participation in the Tehran trilateral involving Afghanistan and Iran is aimed at operationalising the International North-South Transport Corridor, a move that symbolically and materially challenges the dominance of Western-aligned trade routes. These calibrated decisions reinforce the idea that India is not merely balancing great powers but bargaining for regional influence within a divided and contested geopolitical matrix.

Modi-Jaishankar Doctrine: Autonomy with Assertiveness

India’s foreign policy posture under the current leadership is neither doctrinaire nor diffused. It is defined by flexible pragmatism and clear-headed assertiveness. External Affairs Minister Dr. S. Jaishankar’s assertion at the Munich Security Conference that “Partnerships must serve national interests, not substitute them” reflects this strategic mindset. India’s selective alignment be it with the Quad, BRICS+, or West Asian energy forums demonstrates a refusal to be straightjacketed into ideological binaries.

Whether on the Taiwan Strait issue, the ongoing Israel-Gaza hostilities, or the continuing Ukraine conflict, India has avoided polemics and instead foregrounded humanitarian concern and strategic restraint. This calibrated stance has sometimes invited critique, particularly from Euro-American commentators who see neutrality as ambiguity. However, it is more accurately interpreted as diplomatic maturityan insistence on policy space, dialogue pluralism, and interest-based alignment.

Prime Minister Modi’s articulation during his U.S. address in 2023 that “India walks with all, but stands firmly on its own path” was not mere rhetorical flourish. It captures India’s intent to operate as a civilisational state with its own compass, capable of engaging deeply without being drawn irreversibly into great power rivalries. This ability to negotiate relationships while preserving independence reflects the very essence of strategic bargaining in a fragmented international order.

Techno-Geopolitics and Strategic Hedging

India’s growing strategic convergence with the U.S. increasingly hinges on techno-geopolitics. From semiconductors to cyber resilience, the two nations are crafting a new axis of trust built on democratic innovation. The Gujarat-based semiconductor facility by Micron Technology, with public-private investment exceeding $2.5 billion, is only one of several examples of this shift from dependency to joint capability creation. Furthermore, initiatives like the Quad Fellowship, involving Indian STEM scholars working in the U.S. and Japan, reflect a long-term human capital partnership.

Yet, structural challenges persist. India’s research and development spending remains below 0.8 percent of GDP, well beneath global innovation leaders. Regulatory bottlenecks, infrastructure gaps, and uneven digital access also inhibit seamless expansion. Nevertheless, the introduction of the 2025 Digital Sovereignty Bill, emphasizing ethical AI frameworks and indigenous data stewardship, signals India’s ambition to shape global tech norms instead of merely adopting them. In this realm too, India is not choosing sides but negotiating influence asserting itself as a rule-maker through strategic bargaining.

U.S. Elections 2024: Navigating Uncertainty with Strategy

The return of Donald Trump to the White House in early 2025 has introduced a new layer of complexity to the Indo-U.S. strategic equation. Known for his unpredictable and transactional style, Trump’s recent statements have reiterated his belief in bilateralism and “fair trade” principles. While India can expect intensified scrutiny on tariffs and market access, there is also likely to be greater alignment on issues such as China containment, counter-terrorism, and defense exports.

India must, however, guard against the volatility of U.S. domestic politics. The growing polarisation within the American establishment, with sharply contrasting views on immigration, climate finance, and digital regulation, requires India to institutionalise its gains rather than personalise them. Building bipartisan consensus in Washington around India’s strategic utility remains a key challenge. India’s approach to this challenge engaging across the aisle while asserting red lines is emblematic of strategic bargaining in a deeply divided world order.

Risks and Room for Reinvention

India’s strategic balancing act, though commendable, is not risk-free. Diplomatic overstretch, institutional inertia, and inconsistent bureaucratic delivery could erode the dividends of convergence. Moreover, China’s renewed economic diplomacy in South Asia, including its expansion of the China-Pakistan Economic Corridor and new infrastructure deals with Bangladesh and Sri Lanka, poses long-term strategic concerns for India.

To consolidate its rising profile, India must continue investing in institutional depth, regional integration mechanisms, and civil service reforms that ensure timely execution of international commitments. The legacy of India’s G20 presidency, particularly the push for Digital Public Infrastructure (DPI) for the Global South, must evolve into a policy infrastructure that sustains credibility and leadership. As the global order becomes more contested, India’s ability to refine the art of bargaining across sectors, regions, and ideational frameworks will determine its long-term strategic capital.

Conclusion: From Balance to Bargain, with a Purpose

India’s evolving partnership with the United States is a case study in twenty-first century diplomacy, one that replaces ideological alignment with interest-based bargaining. This relationship is underpinned by co-developed technologies, regional recalibrations, and joint norms-setting in the Indo-Pacific. Yet, its durability will depend not on converging values alone, but on delivering mutual strategic returns.

India is no longer content with balancing great powers. It is actively bargaining with them. In doing so, it signals a coming of age as a civilisational power that aspires to set the rules, not just follow them. As Dr. Jaishankar aptly observed, “Autonomy is not about isolation; it is about choosing wisely.” In a fractured world, India’s strategic wisdom, calibrated, contextual, and self-assured, may well be its greatest geopolitical asset. The India-U.S. relationship, when seen through this lens, represents not a conventional alliance but a fluid arena of continuous negotiation and mutual calibration. It is, indeed, the art of strategic bargaining in a divided world.

The writer is Faculty, Political Science and International Relations, Centre for Excellence in Public Management, Government of West Bengal