What Does Vance’s Trade Visit Hold for India?

By Shreya Upadhyay*

Published on April 21, 2025

When US Vice President JD Vance lands in New Delhi on April 21 for a four-day visit, accompanied by his Indian-American wife, Usha Vance, and their three children, the optics will go far beyond standard diplomatic protocol. This isn’t just another bilateral handshake and photo-op. It’s a moment rich with cultural symbolism, economic stakes, and political complexity.

Usha Vance, one of the most prominent Indian-American women in conservative legal circles, brings with her not just ethnic connection but cultural capital. Their 2014 interfaith wedding drew headlines, and Vice President Vance has spoken openly about how Hindu values like seva (selfless service) and karma have subtly informed his approach to politics—particularly his focus on rural America, economic justice, and the dignity of the working class.

That kind of ideological synergy offers a rare opportunity for both sides to strengthen not just geopolitical ties, but human ones. But the timing of this visit also underscores the serious undercurrents in U.S.-India trade relations, with tension brewing under the surface.

Tariffs, Trade, and the Trump Doctrine

Vance arrives even as President Donald Trump’s latest barrage of reciprocal tariffs has left Indian exporters on edge. Promising ‘Liberation Day’ on April 2, Trump announced a volley of tariffs on several countries, including a 27% duty on Indian goods—though India, unlike China, received a 90-day reprieve. The respite is temporary. If no deal is struck, India’s exports to the U.S. could decline by as much as $5.76 billion in 2025, according to the Global Trade Research Initiative (GTRI).

This comes amid a broader trade war between the U.S. and China, with both sides lobbing tit-for-tat tariffs well over 100%. As China urges India to form a common front against “U.S. tariff abuse,” New Delhi finds itself at a crossroads. Does it double down on economic nationalism? Or does it seize the moment to finally push through meaningful trade reform?

The BTA: A Test of Political Will

High on the agenda for Vance’s visit will be reviewing the progress on the Bilateral Trade Agreement (BTA). Prime Minister Modi has expressed optimism that such a deal will help in resolving the ongoing differences over tariffs. India has often been dubbed the “tariff king” by Trump, has now started cutting tariffs on key American exports—bourbon whiskey, Harley-Davidsons—to show goodwill. India has also shown a commitment to increase purchases of American defence and energy products.

Still, major sticking points remain. Agriculture and dairy access—historical red lines for India—continue to complicate negotiations. The tariffs can seriously impact India’s niche dairy exports such as specialty cheeses and whey protein concentrate that have gained popularity in international markets.  An influx of cheap imports can seriously impact country’s economic output. Other Washington’s demands such as weakening of minimum support price system for farmers, allowing genetically modified food imports, lowering agricultural tariffs can impact farmer incomes, food security, bio diversity, etc. 

A Chorus of Diplomatic Voices

Vance isn’t arriving in isolation. His visit is part of a broader wave of high-level US engagement with India. Tulsi Gabbard, the Director of National Intelligence and a longtime friend of India, was in New Delhi in March. US National Security Adviser Mike Waltz is also expected to visit, co-chairing the India-US Initiative on Critical and Emerging Technology (iCET) alongside his Indian counterpart Ajit Doval. Defense Secretary Pete Hegseth is expected later this summer.

Washington is courting India with purpose, and urgency. Amid the global uncertainty stirred by the U.S.-China trade war, India is being called upon to play a stabilizing role in the Indo-Pacific, to diversify global supply chains, and to become a credible economic counterweight to Beijing.

Mixed Messages from Delhi

Yet for all the high-level diplomacy, India’s messaging remains muddled. While External Affairs Minister S. Jaishankar recently struck an optimistic tone about concluding key trade agreements with the U.S., EU, and UK this year, Commerce Minister Piyush Goyal cautioned against negotiating “on gunpoint.” These mixed signals can become counterproductive.

The stakes are high. The US remains India’s largest trading partner, accounting for around 18% of Indian exports. In FY 2023-24, India’s total exports stood at $437 billion, with $129.2 billion in bilateral trade with the U.S. A failure to secure a trade deal could see critical sectors—steel, fish, diamonds, electronics—take a significant hit.

And yet, New Delhi must tread carefully. India has already filed for consultations at the World Trade Organization over U.S. steel and aluminium duties. These disputes do not fall under the WTO dispute settlement system. 

A Defining Economic Moment

Vice President Vance’s visit could be a turning point. For all the cultural symbolism wrapped up in the visit, it is the cold calculus of trade policy that will define its success. If India can leverage this opportunity to finalize a bilateral trade agreement, it could usher in a new era of industrial and agricultural reform, transforming India’s economic trajectory.

Economist Surjit Bhalla has called it a ‘Trump-sent opportunity’ and India’s “second 1991 moment”—a chance to reset, reform, and re-enter the global economic arena with confidence.

The question is: will India rise to the occasion?

*The author is Assistant Professor at the Christ University, Bengaluru and also serves as Deputy Director at Kalinga Institute of Indo-Pacific Studies