CWA # 2094
NIAS Global Politics, Young Voices (GPYV)
Transactional US foreign policy and it implications for India’s Strategic Autonomy
Remembering Amb PS Raghavan and his legacy
Amb Raghavan’s insights in US-India power asymmetry, the US “Expectation Trap” and avoiding the European fate are important for New Delhi to pursue its strategic autonomy.
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Rakshitha B
12 May 2026
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Trump and the transactional US
The US foreign policy under President Trump has undergone a major shift in how Washington engages with the world. The rule-based global order is undergoing a paradigm shift; Trump 2.0, under the garb of protectionism, sees allies not as partners, but as competitors. The institutions built to protect multilateralism are getting sidelined and becoming dysfunctional; the UN remains paralysed. Multiple countries now operate in a space where rules are either weak or absent. This trend highlights the shrinking of multilateralism in a multipolar world, encouraging the emergence of regional trade blocs and bilateral partnerships.
The “Liberation Day” tariffs of April 2025 highlight the US's economic unilateralism. Blanket tariffs were imposed on over 180 countries, highlighting the gradual transition from a rules-based international order to one determined by power and leverage in diplomacy. The US is also using its maximalist approach as a tool of military and economic extortion, as seen in the Greenland crisis of January 2026 and in a USD 500 billion trade purchase mandate from India. This transactional turn in the US’s foreign policy forces countries to acknowledge the change and recalibrate their strategies. Trump’s unilateralism has paved the way for institutional hedging among countries; for example, India and Europe, and how New Delhi has dealt with trade agreements with the EU and the UK. Though these agreements had remained in the background, Trump’s policies prompted him to urgently secure reliable partners.
Implications for India’s strategic autonomy
Since independence, India has crafted its foreign policy with strategic autonomy as a major principle. What was once described as non-alignment under Nehru is today understood as multi-alignment. A key challenge for India is how the US would address the USD 45.7 billion trade deficit with India. By invoking the International Emergency Economic Powers Act (IEEPA), a statute historically reserved for adversarial states, Trump has flattened India. Instead of pursuing a mutually negotiated correction, the US has imposed the highest tariffs on India and additionally demanded a USD 500 billion trade purchase mandate from India over the next five years. India’s economic framework is under pressure as the strategic partnership is gradually turning into an audit-based alliance.
There is also a complete departure from Trump’s first term, in which the focus was on specific trade disputes involving Harley-Davidson motorcycles, duties on bourbon whiskey, medical device price caps, and the withdrawal of India’s GSP privileges. These issues, while contentious, remained confined to sector-specific market access issues. Now, the concerns go far beyond tariffs targeting India’s tariff regime, non-dollar trade policy, and its industrial autonomy. India is being demanded to re-engineer its economic policy so that it remains a guaranteed customer to the US market.
The most contentious challenge is India-Russia relations, particularly India’s increased purchase of Russian oil following the Ukraine war. India’s trade ties with Russia were commercially viable, strategically sound, and entirely sovereign, which the US is unhappy about. The US levied a double-layered tariff , a 25 per cent reciprocal duty combined with an additional 25 per cent ‘Russia penalty’, creating a cumulative burden of 50 per cent. These actions were eased only after India reduced its imports of Russian oil to a 38-month low. The implication is huge: a foreign government, through trade policy, can effectively determine where a sovereign nation sources its energy.
The most troubling aspect is the increasing convergence between strategic sensitivities and economic negotiations. After Operation Sindhoor in 2025, Washington repeatedly claimed credit for the May 10 ceasefire, a claim India has firmly rejected, insisting that its most sensitive dispute remains bilateral and sovereign. Collectively, these developments reveal a partnership increasingly shaped by pressure, conditionalities, and competing strategic expectations. For India, the central challenge will be to navigate this evolving relationship while safeguarding its economic autonomy and strategic independence.
Ambassador PS Raghavan’s Insights on Strategic Autonomy
Amb Raghavan’s insight on this issue centres on the uncomfortable truth: there is a systemic power asymmetry between India and the US. The US, being a global power, has interests everywhere and demands alignment from everyone. India, still an expanding power, cannot and should not meet that demand. He calls it the Expectation Trap. Amb Raghavan warns that when countries do not recognise this asymmetry, there tends to be a securitised globalisation. A country’s energy choices, its payment systems, and its trade partners all become tests of loyalty. He explains how Europe did not recognise this asymmetry and had to delegate its energy to Russia and its security to America. Amb Raghavan cautions India to avoid the European Fate and choose differently.
When the rules-based order began to deviate towards the US’s punitive tariffs, dollar weaponisation, and unsolicited mediation, India's response was not to protest or engage in confrontation. Instead, the focus was on building parallel architectures, such as BRICS payment mechanisms, and on concluding eight FTAs spanning 26 countries. According to Amb Raghavan, this reflects the strategic maturity India must embody as it pursues its long-term vision of a Viksit Bharat. Amb Raghavan calls for a broad-based network beyond the great-power binaries, reiterating that India must build partnerships wide enough so that no single power can hold it hostage.
India has preserved its Russian energy ties, engaged with BRICS payment mechanisms, and concluded trade agreements with the EU and the UK, each a calibrated move to safeguard autonomy under pressure. In fact, the imposition of the US tariffs, while coercive in intent, has had an unintended consequence; it has pushed India to accelerate trade engagements elsewhere, secure new agreements, and gain wider exposure in global markets. In that sense, pressure has also created opportunity. Raghavan’s warning about a potential “European fate” remains persuasive, and India, so far, has avoided that trajectory.
However, the divergence of perspective occurs on the question of asymmetry. Amb Raghavan presents it as a structural constraint that India must cautiously navigate. Yet, the developments of February 2026 suggest a more fluid reality. Washington scaled down tariffs from 50 to 18 per cent, and the much-publicised $500 billion “commitment” was diluted to a mere “intention.” These were not concessions extracted from India; rather, they were adjustments made by the US. The American need for the Indian market, particularly in meeting its own growth ambitions, has begun to recalibrate the balance.
This brings us to the central question: the implications of America’s transactional turn on India’s strategic autonomy are neither linear nor one-dimensional. The pressure has been real, but so has India’s response. The relationship today does not resemble what Washington may have envisaged in 2025, and that divergence is the result of deliberate strategy, not chance.
To conclude, Amb Raghavan’s core lesson was the consistent and patient practice of strategic autonomy. Strategic autonomy is not merely a guiding principle of India’s foreign policy. In 2026, it stands as the decisive line separating a rising India from a compliant one.
About the author
Rakshitha B is a final-year undergraduate student of political science and economics at Mount Carmel College
