Dr. Arun Sahgal

Prognosis: Relationship exhibits asymmetric convergence — hard security and technology cooperation runs on a multi-year institutional track, while trade and the overarching strategic narrative remain transactional, leadership-dependent, and shock-prone. It is resilient at the working level and increasingly fragile at the political-symbolic level, an inversion of the pre-2025 pattern.

Plausible Near Term Scenarios (Two-Year Horizon)

Consolidation (moderate-high probability): BTA signed following the 24 July tariff cliff; MDP implementation accelerates; Quad receives renewed articulation. Trade friction becomes a managed, cyclical irritant. *Signposts:* BTA signature, a 414-engine co-production deal, explicit Quad/India language in a revised NDS.

Transactional Equilibrium (highest probability, base case): No comprehensive BTA; periodic tariff renegotiation continues; defence and technology cooperation continues to progress regardless. The relationship becomes durably compartmentalised — strong on security, choppy on trade. *Signposts:* Section 122 tariff lapses or is extended without a full BTA; defence engagements proceeds amid continued limited US engagement.

Strategic Drift (moderate probability): Repeated tariff shocks, a CAATSA flashpoint over Russian procurement, or a marginalising US Indo-Pacific strategy push New Delhi to visibly accelerate diversification without rupturing the US track; defence cooperation slows in tempo, not principle. *Signposts:* Visible EU/Quad-adjacent acceleration, growing middle-power convergence (Japan, ROK, Indonesia, Vietnam, Philippines), Congressional CAATSA action, or Indian outreach to China around the 2026 BRICS summit.

Rupture/Wildcard (low probability, high impact): A forcing event — sanctions over a major Russian arms purchase, a China-Taiwan or China-India crisis exposing divergent threat calculus, or BTA collapse with punitive re-escalation — produces genuine rupture. Given institutionalised defence ties, unlikely but cannot be excluded. *Signposts:* Formal CAATSA sanctions, 100% duty on Russian oil purchases, or a major crisis forcing an explicit alignment choice.

Near-Term Watch Points: the Section 122-to-Section 301 tariff transition; whether the 2026 NDS is amended to reincorporate India/Quad language; Congressional movement on a CAATSA waiver; pace of MDP and iCET-successor implementation; and Indian farm-sector resistance as a ceiling indicator on BTA agricultural chapters.

Medium-Range Outlook, 2026-2035

A 2035 projection separates slow-moving structural drivers from genuinely uncertain contingent drivers; the near-term scenarios above are the entry ramp into one of several decade-long trajectories.

Structural drivers include: an economic weight shift, with multiple projections (Morgan Stanley, CEBR, S&P) converging on India becoming the world's third-largest economy sometime between 2027-2030 and roughly doubling current GDP to the $9-10 trillion range by 2035, driven by urbanisation crossing 50%, manufacturing diversification away from China, and several individual states each approaching $1 trillion GDP — structurally shifting India from a market Washington wants access to toward an economic player Washington increasingly needs as a partner, reducing India's need to accept transactional terms and increasing its negotiating leverage over time; defence indigenisation under the Atmanirbhar Bharat push, which if sustained will steadily reduce India's historical dependence on imports split across Russia, US, France, and Israel in favour of co-production and IP-transfer arrangements. A trajectory that favours the US relatively as Russian supply reliability continues to erode from sanctions and war-time attrition, while favouring India absolutely through reduced single-supplier dependence; technology bifurcation, as the US-China technology contest hardens further and India's position within US-aligned semiconductor, AI-compute, and critical-minerals ecosystems (iCET-successor tracks, Pax Silica, FORGE) becomes, if sustained, a genuine node in a trusted supply-chain architecture rather than a swing state within it; a demographic and workforce trajectory that keeps India's working-age population expanding through the mid-2030s just as the US, China, and most of the developed world age further, underwriting continued interest in migration and mobility arrangements, services trade, and India's role as a talent pipeline for the US tech and healthcare economy regardless of which administration is in office; lastly the military-technological balance vis-à-vis China, where continued Chinese naval, missile, space, and cyber modernisation alongside India's own considerable indigenous progress sustains the underlying strategic logic for deepened US-India defence-technology cooperation independent of which party controls the White House or which coalition governs in New Delhi.

Contingent drivers include leadership transitions on both sides (institutional depth is designed to be leadership-resilient, but trade has proven highly leader-dependent); Russia's post-war trajectory and continued viability as a supplier; China's trajectory toward greater aggression or accommodation; the institutional fate of the Quad; and whether domestic protectionist and agricultural pressures remain manageable irritants or periodically re-escalate.

2035 Scenarios: 

A - Embedded Pole (Deep Convergence): sees India fully embedded as a trusted technology and defence-industrial partner, with a durable successor trade architecture and a Quad-based security structure approaching treaty-ally-level cooperation without formal alliance status; moderate probability, contingent on leadership continuity and no major rupture. 

B - Durable but Uneven Partnership: (highest probability, the linear extrapolation) sees today's asymmetric convergence persist at scale, with recurring trade friction and looser-than-operational strategic alignment on China/Indo – Pacific. India uses its growing economic weight to negotiate harder rather than aligning more closely. 

C- Multipolar Hedge Deepens: Sees India's rise and continued multi-alignment reduce its structural need for the US specifically, treating Washington as one major partner among several by 2035; defence and technology partnership continues but at lower scale. Moderate probability, rising if Scenario-D-type shocks recur. 

D - Crisis-Forced Realignment: Major regional crisis (LAC/Maritime clash) compresses gradual convergence into rapid deepening — or, if the US response disappoints, a credibility rupture; low probability on account discrete event but not discountable cumulatively over a decade.

Core 2035 Findings: The highest-confidence call is that India's absolute and relative economic and military weight will be substantially greater by 2035, shifting the relationship's character from "India courting the US" toward two major players managing a less asymmetric partnership. The lower-confidence variable is whether that growing weight channels into an institutionalised Indo-Pacific security structure (A/B) or a genuinely multipolar Indian posture treating Washington as first among equals (C). Absent a forcing event, Scenario B is most likely, with probability mass shifting towards C depending on how the current trade cycle and the next two-to-three leadership transitions are managed.

India's Strategic Options and Policy Approach

The 2035 scenarios above are not equally desirable for India, and India is not a passive variable in which they simply materialise — its own policy choices will be an equal driver of which trajectory dominates. The organising objective for Indian policy should be to maximise optionality while the power balance is still shifting in India's favour, rather than locking into a fixed alignment posture prematurely in either direction. India's leverage is rising on a structural economic and demographic trajectory that does not depend on Washington's cooperation to continue; this means India's strongest strategic position is not to choose between deep alignment and a multipolar hedge now, but to preserve the ability to move toward either as circumstances emerge. Over the next five to seven years, while its relative weight is still growing, the priority should be extracting better terms and building redundancy, rather than over-committing to a single architecture while its bargaining position continues to improve.

Toward Scenario A (if deep alignment serves Indian interests): convert the MDP and iCET-successor tracks from framework agreements into binding co-production and technology-transfer outcomes that build indigenous capability (jet engines, semiconductors, AI compute) rather than end-user status; use the critical minerals pact as a template for higher-value-add supply-chain integration; and push for an explicit, durable Indo-Pacific institutional role that outlives any single US administration.

Toward Scenario B (the base-case management task): treat trade friction as recurring negotiation rather than crisis, building a standing BTA implementation/dispute mechanism; deliberately compartmentalise the defence-technology track from trade volatility, reinforcing the existing de facto pattern; and manage the domestic political ceiling by sequencing agricultural concessions with compensating support rather than letting negotiations repeatedly stall.

Toward Scenario C (an insurance strategy worth pursuing regardless): accelerate diversification already underway — the EU partnership, Gulf ties, ASEAN arrangements, Global South leadership; deepen defence indigenisation as a genuine hedge against dependence on any single supplier, increasing leverage with all of them; and expand currency and payments diversification to reduce exposure to US financial leverage without provoking confrontation.

Guarding against Scenario D: invest now in crisis-management and signalling channels with Washington (military-to-military hotlines, pre-agreed consultation mechanisms) so alignment decisions are not made under acute pressure; avoid rhetorical or doctrinal commitments that would be hard to walk back if a crisis exposes a gap between US declaratory support and actual response; and manage the Russia relationship as a gradual glide path rather than an abrupt break.

Cross-cutting, no-regret moves that serve Indian interests under every scenario: institutionalise what currently depends on personal chemistry between leaders, embedding gains in durable bureaucratic and legislative structures; front-load defence-industrial co-production over pure arms purchases, since capacity-building hedges pay off across all scenarios while pure purchases hedge against none; treat technology-ecosystem integration (semiconductors, AI compute, critical minerals) as the highest-value track to protect, given its long payoff horizon; and keep the strategic-autonomy doctrine explicit and publicly reaffirmed — not as anti-American positioning but as a credibility asset, since an India unable to say no has less leverage when it says yes.

Principal risk to manage: India's greatest strategic risk is not choosing wrongly between alignment and autonomy, but drifting incrementally into cumulative defence and technology dependence without a corresponding formal upgrade in US reciprocal commitment — ending up exposed to the costs of alignment without its security guarantees. The discipline required is to ensure every increment of deepened cooperation is matched by a reciprocal, binding gain in capability, market access, or institutional standing, rather than accumulating dependence on goodwill and personal rapport alone.