White House

India could be a strategic partner for the US, says analyst

Key Points
  • India could benefit from a protracted U.S.-China trade war as manufacturers look for alternatives and Washington looks for another partner in Asia.
  • " It is not a true counterbalance to China in the Indian Ocean basin but it is certainly a country that can be a strategic partner with the United States in that region," say Rodger Baker, senior vice president of strategic analysis at Stratfor.
  • He says a closer relationship with New Delhi could potentially have many upsides for the U.S. and was something Washington had been interested in before the Trump administration.
President Donald Trump shakes hands with Indian Prime Minister Narendra Modi as they begin a meeting in the Oval Office of the White House in Washington, on June 26, 2017.
Carlos Barria | Reuters

India's economy may not be as big as China's, but it could still be a good partner for the U.S. amid a protracted trade war, one global political analyst told CNBC on Tuesday.

"India is still a very large country. It has a relatively robust economy, (it has) a lot of potential down the road. It is not a true counterbalance to China in the Indian Ocean basin but it is certainly a country that can be a strategic partner with the United States in that region," said Rodger Baker, senior vice president of strategic analysis at geopolitical intelligence firm Stratfor.

On Sunday, U.S. President Donald Trump and Indian Prime Minister Narendra Modi appeared together at a Texas rally, increasing hopes for a trade deal between the world's largest and sixth largest economies. Negotiators are trying to hash out a deal for Modi and Trump to sign at the United Nations General Assembly in New York this week, Reuters reported citing people familiar with the matter.

Baker said a closer relationship with New Delhi could potentially have many upsides for the U.S. and was something Washington had been interested in before the Trump administration.

Modi and Trump took the stage in Houston in apparent good spirits, a recent shift from tense trade relations.

Over the summer, U.S.-India trade tensions spiked as the Trump administration ended preferential trade treatment for India that had allowed for up to $5.6 billion worth of Indian goods to enter the country duty free. In response, Modi's government raised tariffs on 28 American products — a move Trump called "unacceptable."

Those headlines were dwarfed by the U.S.-China trade war, as the world's two largest economies slapped tit-for-tat tariffs on each other. While that escalation disrupted the global economy and roiled markets in recent weeks, it has also been a boon for other manufacturing countries.

The biggest winners in the the "constant trade competition between the United States and China" are countries like "Vietnam, Indonesia, parts of Southeast Asia," said Baker. But looking ahead, he said, India could benefit from the situation too.