Modi & Trump’s 'TRUST' deal: A tech-driven bond beyond tariffs

While tariff talk is still in the air, Narendra Modi and Donald Trump deepening engagement between their two countries by signing the TRUST (Transforming the Relationship Utilising Strategic Technology) initiative is the real bilateral headline news. This is welcome news and deft diplomacy within weeks of Trump assuming office. The areas covered - AI, semiconductors, defence, space and biotech - will propel India as a complementary force to US tech dominance. India needs access to tech and must build manufacturing capability in strategic industries. The US, on its part, needs supply chain resilience. Take AI. The tech is being advanced in Silicon Valley with contributions from Indian software engineers, who will also aid its dispersal. India must scale up hardware capacity to contribute more at both ends of the tech's development and deployment.

US defence production has incorporated Indian vendors, and the process can be sped up with access to more US tech. This benefits India's indigenous defence production effort. As a big buyer of US weapons platforms, growth of local vendors helps both the US and India lower costs. Commercial exploitation of space, too, will benefit from a bigger role for Indian firms as tech costs are being driven down. From the US perspective, India is an alternative to China in biotech. Emergence of an Indian ecosystem in each of these areas should lower innovation costs - vital for the US to maintain its tech lead over China.

Washington's signal to US companies about its comfort with New Delhi should accelerate tech-driven outsourcing. India has a long way to go before it catches up with the world's biggest defence spenders, and the US will want to be there for most of that journey. Strategically splitting production of armaments is economical. Greater access to core and allied tech is needed to nurture ties. It speaks of Trump's priorities that the India-US tech-sharing agreement is being unveiled when the US threatens the rest of the world with reciprocal tariffs.