The Strategic Framework is Set: Prioritizing Tactical Wins for the U.S.-India Century
Hello, I’m Ylli Bajraktari, CEO of the Special Competitive Studies Project. In this edition of our newsletter, I share my reflections on a recent trip to India, which coincided with the Vice President's visit.
While in India, I had the honor of interviewing Dr. S. Jaishankar for the latest episode of Memos to the President. We discussed the forces of globalization, the impact of the AI revolution, the evolving dynamics of U.S.-India relations, and India's growing role on the world stage. I hope you enjoy the conversation.
The Strategic Framework is Set: Prioritizing Tactical Wins for the U.S.-India Century
My recent trip to India coincided with the visit of Vice President Vance, whose remarks underscored the profound significance of the U.S.-India partnership. As he articulated, the 21st century is undeniably poised to be defined by the trajectory of this relationship. He emphasized the deep connection and shared vision for the future between the two nations, highlighting the need to build together as global partners based on fairness and shared national interests. The Vice President also outlined key areas of collaboration, specifically mentioning defense, energy, and technology as critical domains for deepening ties and fostering mutual growth through economic rebalancing. These themes were reflected in our conversations as well, as we recognize this moment of geopolitical flux as one that demands a pragmatic engagement and accelerated collaboration, particularly in technology and defense, to enable a significant strategic leap forward.
India's Economic Foundation and Industrial Ambition
India's economy demonstrates remarkable resilience amid global uncertainty, maintaining a robust estimated growth rate of over 6% for this Fiscal Year. Sustained public investment in India's physical, social, and digital infrastructure is powering a resurgence in national strength. These strategic capital expenditures deliver a potent multiplier effect—estimated at up to 3.25 times—and their impact compounds over time, fueling greater prosperity, resilience, and competitiveness. In the last decade, India added over 54,900 kilometers of national highways and 31,000 km of new railway tracks, carrying capacity at major ports has nearly doubled to more than 1.6 billion tons per annum, and the number of operational airports has grown from 74 to 157. This accelerated infrastructure development is fundamentally reducing logistics costs and enhancing economic efficiency.
At the heart of India's industrial ambitions lies the electronics manufacturing sector, often referred to as a "mother industry" that permeates all aspects of modern life and industry. While India historically lagged, becoming primarily a consumer rather than a producer, there is now an "undeclared national emergency" to rebuild its foundational industrial base. India's electronics manufacturing base currently stands at around $130-$140 billion, but it is still dwarfed by China's market. The focus is shifting towards high-tech industries, including a major push into semiconductors. Five semiconductor projects are under construction following government approvals, and involve partnerships with major global manufacturers. The potential for the first "Made-in-India" semiconductor chip is set to be launched later this fall. In addition, there is a strong focus on developing indigenous Assembly, Testing, Marking, and Packing (ATMP) capabilities alongside these partnerships.
Building a robust ecosystem, not just isolated factories, is paramount. This includes leveraging India's vast talent pool. In 2020, India had over 2.5 million STEM graduates and nearly 10 million students enrolled in STEM fields. Universities are integrating world-class design tools into their curriculum, training students on the latest industry-standard software. Indian IT and electronics minister, Ashwini Vaishnawwith, has emphasized the goal of transitioning India into a "product nation," developing its own chipsets across low, mid, and high-value segments. Electronics manufacturing is also seen as a powerful social transformer, creating labor-intensive, quality jobs with regular wages. Electronics exports have increased dramatically, showing a verified fivefold increase over the last decade and rising to become the third-largest export category in early 2025. By 2030, electronics exports are estimated to be between $180-200 billion or more, and total electronics production is estimated to reach $500 billion. Challenges remain, including significant dependence on China for manufacturing inputs, with component imports meeting 60-80% of demand and over half sourced from China and Hong Kong, resulting in relatively low domestic value addition. A need to further improve the ease of doing business and policy predictability, as well as addressing regulatory complexity and cost competitiveness, also persists.
Navigating the Geopolitical Landscape: India's Strategic Approach
India views the current international environment as a "new world," one that is more national, regional, and plurilateral than the previous liberal international order. In this context, India is pursuing a pragmatic, interest-driven foreign policy characterized by "strategic autonomy," distinct from the passive non-alignment of the past. Strategic autonomy is defined as the ability to make autonomous decisions based on national interest, actively engaging with a multipolar world. This approach is sometimes perceived as a constraint due to dependencies on countries like Russia–which represents over 70% of India’s military imports historically–and China for manufacturing inputs. The term "strategic autonomy" itself is noted by some as being disproportionately used in dialogue with the United States compared to other partners. However, a key perspective is that the United States is not the cause of India's strategic autonomy challenge, but rather the answer, by providing alternative partnerships that reduce these dependencies. Ultimately, strategic autonomy is not an end in itself, but a means to achieve the goal of a "Viksit Bharat" (Developed India) by 2047.
India aims to position itself as a "Vishwa Bandhu" (friend of the world) and "Vishwa Mitra" (partner of the world), maximizing friendships and minimizing problems. This includes actively championing the interests of the "Global South," articulating their concerns on international platforms, and serving as a bridge between the developed and developing worlds. India's G20 presidency, which saw the African Union join as a permanent member, and its Vaccine Maitri initiative are cited as examples of this commitment.
The relationship with China is acknowledged as deeply complex and marked by competition and unresolved border issues following the 2020 standoff. India approaches this with realism, strengthening border infrastructure, enhancing military preparedness, and maintaining troop deployments. India also leverages partnerships, such as the Quad, to balance China's regional influence. While seeking stability based on the three mutuals—mutual respect, mutual sensitivity, mutual interests—the emphasis on these terms increasingly signals that normalization requires tangible changes in Chinese behavior, particularly regarding the border.
Regarding global conflicts, such as the war in Ukraine and the situation in the Middle East, India advocates for dialogue and diplomacy, stressing that solutions will not come solely from the battlefield. India has maintained a neutral stance on Ukraine, refraining from condemning Russia while calling for a cessation of hostilities, leveraging its unique ability to communicate with both sides. This approach aligns with its multi-alignment strategy and highlights the detrimental impact of such conflicts on the Global South.
The India-Pakistan dynamic also remains a challenge for India, as the recent terrorist attack in Pahalgam, which occurred during my trip, has reminded everyone. Even as India looks to shape the future world order, it must also resolve dangerous tensions much closer to home.
The Ambition: Forging the U.S.-India Partnership for the Future
The ambition for the U.S.-India relationship, particularly evident in the Joint Statement from the February meeting between Prime Minister Modi and President Trump, is vast and focuses on catalysing opportunities across military partnership, accelerated commerce, and technology. The leaders reaffirmed their unwavering commitment to a dynamic defense partnership spanning multiple domains and announced a new ten-year framework building on the foundational 2005 agreement.
Defense: Collaboration spans expanding defense sales, co-production, and accelerating technology cooperation across space, cyber, and emerging domains. Negotiations for a Reciprocal Defense Procurement (RDP) agreement are underway. Initiatives like the Autonomous Systems Industry Alliance (ASIA) aim to elevate military cooperation, interoperability, and integration in the Indo-Pacific. Likewise, the Indus X initiative is specifically designed to facilitate defense technology partnerships between U.S. and Indian defense companies, investors, and universities. The emphasis is on building mutual strength for peace through shared capabilities.
Trade: A key goal is to more than double bilateral trade to $500 billion by the end of the decade. Both governments are actively working on a trade agreement that focuses on job creation, durable supply chains, and worker prosperity. The finalization of the terms of reference for this negotiation is seen as a vital step towards achieving this ambitious target. The partnership is framed as a clear win-win, benefiting workers and businesses in both nations.
Energy: Strengthening energy ties is seen as essential for economic independence and national security, directly linked to AI ambitions. The United States, with its abundant resources, aims to increase energy exports to India, which will enable India to grow at lower energy costs. The United States also seeks to help India explore its own reserves, including offshore natural gas and critical minerals. Progress on amending India's civil nuclear liability laws is welcomed, as it would allow U.S. producers to explore small modular reactors (SMRs) and build larger reactors in India, helping realize India's nuclear power goals. Removing non-tariff barriers to American access to the Indian market is also suggested to enhance energy ties.
Technology: Technological collaboration is seen as extending well beyond defense and energy. The U.S.-India TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative is a cornerstone, building on billions of dollars in planned investments by U.S. companies in India across sectors like data centers, pharmaceuticals, and undersea cables. The partnership aims to leverage the U.S. lead in AI hardware and India's vibrant startup ecosystem and vast talent pool. Initiatives like the U.S.-India initiative on Critical and Emerging Technology (iCET), TRUST, and INDUS Innovation–an innovation bridge modeled after the INDUS-X platform–are mechanisms to accelerate this. The shared sense of urgency is rooted in a clear understanding that staying ahead in critical technologies like AI is essential to prevent devastating consequences worldwide. This collaboration is seen as an opportunity to leapfrog together in capability and impact, requiring sharing data and algorithms, operationalizing capabilities through joint exercises, achieving real scale through infrastructure support, moving with speed, and institutionalizing the partnership.
From Framework to Forward Momentum
The framework for this deepened U.S.-India partnership is firmly in place, articulated through high-level joint statements and implemented through specific initiatives. This is a moment of immense opportunity, recognized by leaders and experts on both sides. While the vision is ambitious and the geopolitical landscape is challenging, the focus must now shift to achieving concrete, tactical wins that collectively enable the desired strategic leap forward.
The opportunity for co-production and co-development of defense platforms in India for both domestic use and export, the acceleration of technology transfer, the streamlining of regulatory processes, and the continued fostering of industry-to-industry collaboration are critical tactical steps. The convergence of interests, shared democratic values, complementary capabilities (U.S. hardware/R&D, Indian talent/frugal engineering, scale), and recognition of common threats provides a strong foundation. The challenge is to overcome bureaucratic friction and move with the speed and scale required by the current global environment.
The century of the U.S.-India relationship is here. With the right framework established, the focus on tactical execution and accelerated collaboration in the technology sector will be key to transforming this ambition into a shared reality, securing prosperity and stability for both nations and the world.
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