The United States and India are a clear example of this. In 2024, their trade reached about $212.3 billion, showing just how connected the two economies have become. Indian companies have invested more than $40 billion in the US, creating over 425,000 jobs, while American firms have expanded strongly in India. These economic links do more than just support growth—they also encourage both countries to collaborate in defense, intelligence sharing, and diplomacy, proving how business and strategy are tightly connected.

The recent tariffs imposed by the United States on Indian goods have shaken the trade relationship between the two countries. Washington has placed a massive 50% tariff on a wide range of Indian exports, saying it is a response to India’s continued purchase of Russian oil. This includes an initial 25% “reciprocal” tariff, followed by another 25% as a penalty. Together, these measures are expected to affect about $48.2 billion worth of Indian exports heading to the US.

This move has not only hurt trade but also created serious diplomatic tensions. For years, the US and India have built a strong partnership that extended beyond economics into defense and security. But this trade clash has introduced new friction and uncertainty, raising questions about the future of their cooperation. If the dispute continues, both economies could feel long-term consequences, and the broader relationship may struggle to recover.

For the United States, India is by far its most important partners in Asia. These links give India the strength to grow as a regional power and help balance China’s ambitions in the region.

This economic relationship also fuels cooperation beyond trade. It supports joint military exercises, technology sharing, and closer work on security issues. By strengthening India, the US also strengthens its own position in Asia. But if economic ties weaken, Washington could lose influence, and India might look for other partners. Experts warn that the health of this economic partnership is directly tied to defense and diplomacy—without it, the balance of power in Asia could tilt away from US interests.

Over the past two decades, American companies have invested heavily in India—about $70 billion between 2000 and 2025. For many US firms, India is not just a market for selling products but also an important part of their supply chains. Big industries like technology, pharmaceuticals, manufacturing, and services are closely connected with India, and these ties help create jobs and economic growth back in the United States. But these connections also mean that disruptions can be costly. Tariffs have raised expenses for American firms working with India, making them less competitive worldwide and are likely to cause job losses at home. Strong business links have always been the reason why many US companies support closer ties with India. If those links weaken, political support for the US-India partnership could fade, since fewer people and businesses would see the benefits in their everyday lives.

The US-India relationship has grown far beyond just defense and strategy. Today, it is a wide-ranging partnership built on strong economic ties that provide stability even when politics shift. History shows that when countries focus only on strategic cooperation without solid economic links, their partnerships often become shaky during political changes or global crises.

Economic interdependence is what has made the US-India bond more flexible and long-lasting. It creates steady channels for dialogue and helps build institutions that can handle uncertainty in global affairs. Without these economic ties, partnerships are more fragile and easily disrupted by different policy priorities. This makes it harder to work together on serious challenges like regional security threats or global terrorism. A significant loss in context of the already existing uncertainties of our time.