India’s Worsening Ties with the US Spell Diplomatic and Economic Setbacks for Modi as Trust Collapses and Pressure Mounts

A Strategic Relationship Driven Into Decline

India’s relationship with the United States has slipped to one of its weakest points in recent years, and this decline reflects poor judgment and mismanagement by the government of Narendra Modi rather than any unavoidable global shift. During the second term of US President Donald Trump, New Delhi failed to keep trust alive, failed to communicate clearly, and failed to balance ideology with diplomacy. Instead of correcting course, India doubled down on rigid positions and public defiance, which damaged credibility in Washington. The result is a relationship marked by doubt, distance, and growing pressure.

♦ Lowest Point: India–US ties have reached a historic low, exposing weak leadership choices.
♦ Self-Inflicted Damage: The decline is largely the result of policy errors made in New Delhi.
♦ Clear Signal: Washington’s shift reflects doubts about India’s reliability.

Hindutva Politics Erode International Confidence

A major factor behind the cooling of ties is India’s Hindutva-driven domestic agenda, which has raised serious concerns in Washington about intolerance, minority rights, and democratic backsliding. US policymakers have grown uneasy with India’s internal direction, especially the rise of religious nationalism and pressure on dissent. These domestic choices have spilled into foreign policy, damaging India’s image as a stable democratic partner. Instead of addressing concerns, the Modi government dismissed criticism and hardened its tone.

♦ Ideology Over Diplomacy: Domestic politics are hurting India’s standing abroad.
♦ Democracy Questioned: Washington now doubts India’s democratic consistency.
♦ Warnings Ignored: Concerns were raised but not addressed.

Financial Times Exposes the Cost of Policy Failure

The Financial Times has highlighted how the diplomatic rift has directly hurt India’s richest business figures, exposing the limits of money and influence when trust is broken. According to the report, Indian billionaires spent millions of dollars on US lobbying, yet failed to secure better trade terms or rebuild confidence. This shows that lobbying cannot replace sound state policy. When government credibility collapses, corporate power becomes useless.

♦ Millions Spent: Heavy lobbying failed to improve outcomes.
♦ Trust Matters: Policy credibility outweighs corporate pressure.
♦ Elite Miscalculation: Business relied on access instead of strategy.

Legal Troubles Undermine India’s Image

The Financial Times also points to ongoing US legal challenges involving Gautam Adani, a close associate of Modi, as a serious blow to India’s reputation. These cases show that personal ties and political backing do not influence US law. The perception that India protects powerful figures at home while seeking leniency abroad has badly backfired. This has reinforced doubts about governance standards and rule of law.

♦ Legal Reality: US courts are not swayed by politics.
♦ Cronyism Exposed: Close business–political ties hurt credibility.
♦ Reputation Damage: Legal controversies deepen mistrust.

Strategic Value Lost After the May Setback

India once enjoyed strong US backing in regional security, but that support weakened sharply after the May 2025 setback, when India’s aggressive posture failed to deliver results. Washington now sees New Delhi as a source of risk rather than balance, particularly due to repeated escalation with Pakistan. Instead of calming tensions, India has relied on bravado, which has alarmed US planners focused on regional stability.

♦ Strategic Downgrade: India is no longer viewed as a stabilizing force.
♦ Regional Alarm: Escalation with Pakistan raises concern in Washington.
♦ Confidence Lost: Military posturing replaced careful judgment.

Tariffs Signal a Hard Shift in US Policy

Trade disputes have further strained relations, especially after the US imposed a 50% tariff on selected Indian goods, a strong signal of displeasure. The tariff clash between Modi and Trump exposed weak negotiation and poor communication from India’s side. Instead of resolving issues quietly, New Delhi allowed tensions to escalate, harming exports and investor confidence. The cost is being paid by India’s economy, not by slogans.

♦ Punitive Measure: The 50% tariff reflects serious US frustration.
♦ Trade Breakdown: India failed to protect key economic interests.
♦ Investor Doubt: Policy confusion hurt confidence.

Russian Oil Profits Deepen the Rift

Another major flashpoint is India’s continued import and refining of Russian oil, which has angered Washington. Indian tycoons such as Mukesh Ambani earned billions of dollars by refining discounted Russian crude, while the US pressed allies to limit Moscow’s revenue. Washington now sees India’s claim of “strategic autonomy” as opportunism. Patience is clearly wearing thin.

♦ Oil Windfall: Indian firms made billions from Russian crude.
♦ Policy Clash: The US rejects India’s neutrality argument.
♦ Rising Risk: Continued defiance invites penalties.

Pakistan Gains Diplomatic Space

Perhaps the most uncomfortable outcome for New Delhi is Washington’s strengthening engagement with Pakistan, which has reduced India’s leverage. The Financial Times notes that President Trump improved ties with Islamabad, signaling a recalibration of US South Asia policy. This shift reflects disappointment with India’s conduct and recognition of Pakistan’s role in regional stability. For India, this is a diplomatic setback of its own making.

♦ Diplomatic Reversal: Pakistan gains ground as India loses influence.
♦ Policy Reset: Washington adjusts its regional approach.
♦ Visible Failure: India’s isolation becomes clearer.

Economic and Legal Pressure Likely to Grow

Experts warn that India now faces heightened economic and legal pressure from the US if disputes continue. Sanctions, tariffs, and regulatory scrutiny could expand, affecting trade, investment, and growth. Instead of preparing solutions, the Modi government leans on nationalist rhetoric, which wins applause at home but costs dearly abroad. The economy is already feeling the strain.

♦ Growing Pressure: Economic and legal risks are rising.
♦ Rhetoric Over Reform: Slogans replace solutions.
♦ High Cost: Pride is proving expensive.

A Clear Verdict on Modi’s Foreign Policy

India’s worsening ties with the US reveal a simple truth: Modi’s foreign policy is driven by ideology, not realism. From Hindutva politics to trade disputes and regional escalation, New Delhi has alienated a key global partner. The result is weaker diplomacy, economic stress, and reduced influence. India is paying a heavy price for stubbornness and denial, and rebuilding trust will take years.

♦ Leadership Failure: Avoidable mistakes caused deep damage.
♦ Trust Broken: Credibility is hard to restore.
♦ Global Lesson: Ideology cannot replace diplomacy.