Multibillion Dollar Flow

What the POTUS Donald Trump is doing today, he said in 1988 – make the world pay America and open global markets for American products and goods (https://www.oprah.com/own-oprahshow/what-donald-trump-told-oprah-about-his-presidential-hopes-video). These policy changes will no doubt affect businesses worldwide, stymie new investments to avoid risks and slow down global growth.

The recent meeting between Prime Minister Narendra Modi and Trump has been covered in these columns earlier (https://www.thestrategicperspective.org/op-eds/valentino-mega/). Indian media has hailed the meeting as a huge diplomatic win, especially with Trump announcing Modi is a much better negotiator than him, and that there is no contest about this. Trump’s act of adjusting the chair for Modi was viewed as Trump accepting defeat

although some others found the optics akin to fattening the turkey before Thanksgiving. Modi did look flummoxed with questions in the press briefing, simply because teleprompters can’t predict questions, which is why he abhors press conferences. But noteworthy is the reception accorded to Modi at the White House vis-à-vis the norm for other heads of states (https://www.facebook.com/share/v/18euxALTk7/).

Indigenous media terms Trump’s announcement of F-35 jets to India a  strategic move in the Indo-Pacific; even as this hugely expensive, under-rated and under-performing jet, with six accidents already fares lower than the Su-57

Did Trump only “offer” the F-35s and India hasn’t accepted them; the reality will unfold in coming months. But the confidence with which Trump spoke about the US gaining billions of dollars from India was noteworthy. According to a source within the hierarchy, all what Trump spoke of was decided when External Affairs Minister S Jaishankar met Trump’s officials in December 2024 and later before and after Trump’s swearing-in during January 2025. That is why Modi was not surprised by what Trump spoke during their bilateral and at the joint press briefing.

There appears credence in this because when Finance Minister Nirmala Sitharaman presented the Union Budget on February 1, some tariffs affecting US goods were lowered. She also announced intent to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, which would have made America happy. Amending these acts was being brokered by outgoing American ambassador Eric Garcetti (who incidentally was also working to topple the Modi government), to facilitate export of AP1000 nuclear reactors to India, without any liability whatsoever of the manufacturer for maintenance and in event of an accident/disaster. South Carolina abandoned two AP1000 reactors after delays and cost escalation despite spending USD 9 billion. Georgia installed two such reactors at the cost of USD 36.8 billion; initial estimate being only USD 14 billion (https://www.thehindu.com/opinion/lead/nuclear-energy-dangerous-concessions-on-liability/article69211997.ece). In the Bhopal Gas Tragedy, the Centre let Warren M Anderson flee India. In the instant case, the manufacturer is being accorded “no liability” ab initio.  If a disaster happens, suckers will be the public, with the Centre/State doling out paltry compensation to the victims.

The pros and cons of the F-35s, which Elon Musk called “scrap”, have been discussed earlier. One F-35 without weapons and sensor systems costs USD 110 million or more. Besides, let us bury the chimera of transfer of technology. Can we estimate the quantum of multibillion dollar flow from India to the US with or without the F-35s? Rest assured the Trump Administration would have calculated a ballpark figure of the billions it wants from India. DOGE has cancelled the USD 21 million USAID to India.

What some analysts at home think about the Modi-Trump bilateral meet can be read here (https://www.facebook.com/share/p/165db6t8Pd/). Readers would be interested to hear a foreign view as well, which can be heard in this clip (https://www.facebook.com/reel/657984806794859).

No defence deal in India is without kickbacks; be it the AugustaWestland VVIP helicopters or the Rafale jets. Bigger the amount, bigger the kickbacks. As for appeals/court cases, judiciary can hardly afford to rule against the government in power and all political parties have skeletons to hide. The manner in which purchase of 36 Rafale jets was announced, was unprecedented  (https://www.sps-aviation.com/experts-speak/?id=334&h=The-Offsets-Tangle-and-question-of-favourites). According to media, buying 36 fighter jets instead of 126, hiked the price of each jet by 41% (https://www.thehindu.com/news/national/modis-decision-to-buy-36-rafales-shot-the-price-of-each-jet-up-by-41/article61544034.ece). Moreover, Hindustan Aeronautics Limited has failed to provide 40 LCA Tejas to the Indian Air Force, bringing down its fighter squadron strength to around 30 against the sanctioned strength of 42.

The US has been pushing defence deals at every opportunity. For example, it has been hard-selling its Stryker ICV to India since its first offer in 2000. The Stryker is more than two-decades old and its vulnerabilities witnessed in operations are multiple: insufficient armour, wheeled design causing maintenance problem with mud clogging the engine, improvised explosive devices (IEDs) ripping through the flat underbelly, malfunctioning computer system and limited off-road mobility. Troops called it "Kevlar Coffin". According to analysts, Stryker is not designed for direct assault and engaging enemy armour. This ICV will need customisation and technologically configured for Indian terrain, including operations in high-altitude areas. Notably, Stryker is not amphibious, which the Indian Army wants; making it amphibious implies major overhaul. Also, high-level indigenisation and technology transfer would be required.

In November 2023, then India’s Defence Secretary Giridhar Aramane said India was interested in a US offer for joint production of Stryker ICVs. In June 2024, then US Secretary of Defence Lloyd J. Austin cited the "co-production of armoured vehicles with India" during the Shangri La dialogue in June 2024. Simultaneously, US NSA Jake Sullivan visiting India in the same month also spoke of Stryker co-production. Was the US mounting pressure on India?

The Stryker deal is considered a setback to the readily available indigenous Wheeled Armoured Platform (WhAP), also called TATA 'Kestrel', jointly produced by Tata Advanced Systems and DRDO, first showcased in Defexpo 2014. WhAP, with an imported engine, is a 8x8 amphibious ICV that performed well in high-altitude trials. WhAP development provides common platform for wheeled APC, ICV with 30mm cannon, Light Tank with 105mm main gun, command post vehicle, ambulance, special purpose platform, 120mm mortar carrier and CBRN Vehicle. The 30mm cannon, which can be fired remotely, can fire HEI, API and APFSDS-T ammunition. It has an effective range of 3,000m. The 40mm grenade launchers are used as a secondary weapon. It can accommodate anti-tank missiles or a 12.7mm machine gun.

The first batch of WhAP was inducted into the Indian Army on April 12, 2022. The ITBP is also equipped with WhAP, which can carry 2+9 soldiers compared to 3+8 by Stryker. Its power-to-weight ratio is 25, compared to Stryker's 17.24, it weighs 24.5 tons compared to 20.3-ton weight of Stryker but with better power to weight ratio WhAP is better suited for difficult terrain. In May 2024, Tata Advanced Systems secured a deal with Morocco to supply 400 WhAP units; chosen over China's NORINCO Type 08.

According to news reports, the Stryker ICV evaluation trials last year (for reportedly equipping the Indian Army with 530 of these) didn’t go well; its Caterpillar C7 engine with only 300 horsepower struggled to meet requirements of the high-altitude terrain having rarefied air. General Dynamics Land Systems, the manufacturer, is now talking of fitting a new engine in the Stryker and conducting trials first in the US. The question is, with all the noise about self-sufficiency, why are we not going full-ahead in the production of the indigenous WhAP rather than wanting co-production of the Stryker ICV - just to appease the US?  

Commerce and Industry Minister Piyush Goyal is ecstatic about the India-US India Trade Pact, which he says would be finalized by end 2025. However, we can be certain that Trump will levy reciprocal tariffs unless all what he wants (F-35s included) is met. Peace-meal lowering of tariffs by India, like reducing custom duty from 150% to 50% for Bourbon, won’t impress him. According to the media, India may import minimum numbers of F-35s although Trump would want maximum export. In this backdrop, how much will India’s GDP growth fall from the Budget projection of 6,5%-6.7%; causing revenues to slump, widen fiscal deficit, slow private sector investments and causing markets to fall? India's trade deficit had already hit USD 22.99 billion in January 2025.

The author is an Indian Army veteran. Views expressed are personal.