Sometime after the clock strikes midnight in India, Donald Trump will be sworn in as President of the United States of America. His address, to be made on Monday afternoon (Washington time), as he assumes the most powerful position in the world, is expected to focus on “unity in strength,” which will emphasize not the global order’s unity but rather America’s political and economic unity.

That is the basis of Donald Trump’s international strategy—American strength encapsulated in his slogan “America First.” Those who believe that the new American President will be guided in dealings with New Delhi by a special chemistry with Prime Minister Narendra Modi, simply because he has repeatedly referred to him as his “dear friend,” should think again.

Americans have notoriously been inward-looking throughout their history. In the mid-20th century, their victories in Asia and Europe during a world war pivoted them to become the world’s most important power. They assumed this role by doing what they excel at in other matters—being transactional.

From acquiring territory to conducting trade, Americans have perfected a transactional approach, including in diplomacy. Mr. Trump is no exception to this rule.

During his previous presidency, Mr. Trump did not hesitate to slap tariffs on Indian exports or revoke preferential treatment for Indian goods, despite his much-vaunted friendship with Mr. Modi. He acted as he saw fit, leveraging pressure to lower Indian tariff barriers on American exports. Rest assured, he won’t hesitate to repeat such tactics this time around.

India exported approximately $77.5 billion worth of merchandise to the US in 2023-24, accounting for 18% of India’s total exports. This reliance makes the nation highly dependent on the US market.

Additionally, India ranks among the top 10 countries with a trade surplus with the US, even if it is at the bottom of the list. This positions India as a likely target for Trump to press for market access, potentially leveraging trade sanctions. A reduction in access to the lucrative US market due to higher tariffs could prove disastrous for India’s economy.

Naturally, officials at Vanijya Bhavan in Lutyens’ Delhi are anxious. India’s tariffs, averaging 27–30%, are among the highest globally. Duties on alcohol, automobiles, and luxury goods exceed 40%, sometimes reaching 140%. While India often criticizes trade barriers elsewhere, it must acknowledge the frustration its own tariff walls create.

If New Delhi lowers tariffs for US exports, demands for similar concessions from major trade partners in the Gulf, Europe, and East Asia are likely. This would lead to complex and challenging negotiations.

The anticipated American crackdown on illegal immigrants, set to begin Tuesday, has already spurred reports of illegal Indian migrants heading to Canada. Tighter visa norms may also affect Indian software exports, which often involve “body shopping” software engineers to the West.

Indian firms must accelerate the ongoing trend of hiring locals for their Western operations and focus on developing expertise in cutting-edge areas like AI, fintech, and quantum computing, rather than relying on low-end, on-site work.

India will also need to reassess its dependence on cheap oil from Russia and Iran. Trump’s slogan “drill, baby drill” signals his intent for US companies to expand crude and shale oil exports. India, a vast energy market, may face pressure to purchase American oil as part of Trump’s transactional diplomacy.

Despite these challenges, the US still views India as a critical partner, especially as Russian influence wanes. With China as America’s primary global rival, the security imperative for decoupling from Beijing remains strong.

To counter China, the US needs allies to build alternative supply chains—a goal that remains elusive. India’s role in this process is vital, not only because of its low costs compared to the West but also because, as the world’s fifth-largest economy, it boasts a diverse and robust industrial base capable of replacing much of what Chinese factories produce.

India’s projected GDP growth of 6–7% over the coming years further positions it to attract significant capital inflows. However, India has yet to achieve substantial success in “friendshoring.” Over the past five years, Mexico emerged as the largest exporter to the US, increasing exports from $342.68 billion in 2018 to $475.60 billion in 2023—a staggering $132 billion jump. Similarly, Vietnam’s exports to the US rose 133% to $114.44 billion during the same period. In contrast, India’s increase was a more modest $83.77 billion.

Another challenge is India’s and Japan’s reluctance to adopt an overtly anti-China stance. This hesitancy has diminished the Quad’s relevance, leaving AUKUS—a grouping of the US, UK, and Australia—as the primary military alliance countering China in the Indo-Pacific.

Trump’s return raises critical questions for India: Can it continue balancing alliances or will it have to choose sides more openly? If India aligns with Trump’s vision, what will be the rewards and the potential costs?

These are the questions that should concern the powers that be on Raisina Hill as Donald Trump is sworn in as the 47th President of the USA.

The writer is former head of PTI’s eastern region network