US-India COMPACT: A new era of strategic and economic partnership

Dipak Kurmi

(The writer can be reached at dipakkurmiglpltd@gmail.com.)

The United States and India have long shared a relationship rooted in democratic values, mutual strategic interests, and deep people-to-people ties. On February 13, 2025, the President of the United States, The Honourable Donald J. Trump, hosted the Prime Minister of India, Shri Narendra Modi, for an official working visit in Washington, DC. This significant meeting marked a new chapter in the U.S.-India Comprehensive Global Strategic Partnership, as both leaders committed to transformative cooperation under a new initiative, “U.S.-India COMPACT (Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century.”

Elevating Defense Collaboration

Both nations reaffirmed their commitment to a dynamic, enduring defence partnership spanning multiple domains. The leaders announced plans for a new ten-year framework for the U.S.-India Major Defense Partnership, further strengthening defence trade, interoperability, and industrial collaboration. With India’s designation as a Major Defense Partner and its inclusion under Strategic Trade Authorization-1 (STA-1), both sides agreed to review their arms transfer regulations, aiming to streamline defence trade and maintenance operations.

To advance defense technology cooperation, the leaders launched the Autonomous Systems Industry Alliance (ASIA), focusing on AI-enabled defense systems, undersea technologies, and advanced autonomous platforms. Prominent industry collaborations, such as the Anduril-Mahindra partnership for maritime systems and the L3 Harris-Bharat Electronics joint venture for active towed array sonar systems, further reflect this commitment.

Recognizing the importance of joint military operations, the two countries pledged to enhance tri-service exercises such as “Tiger Triumph,” increase intelligence-sharing capabilities, and improve logistics coordination to support overseas deployments, humanitarian relief, and disaster response operations across the Indo-Pacific.

Expanding Trade and

Investment: Mission 500

To expand economic cooperation, the leaders announced “Mission 500,” a bold initiative to double bilateral trade to $500 billion by 2030. In pursuit of this objective, the U.S. and India agreed to negotiate a multi-sector Bilateral Trade Agreement (BTA) by the end of 2025. Key measures include enhancing market access, reducing tariff and non-tariff barriers, and integrating supply chains.

Early steps towards fair-trade practices were welcomed, such as India’s reductions in tariffs on U.S. bourbon, motorcycles, ICT products, and metals. Additionally, India increased market access for U.S. agricultural exports, while the U.S. facilitated greater Indian exports of industrial goods and labour-intensive manufactured products.

Both leaders acknowledged the impact of greenfield investments in high-value industries. Indian companies such as Hindalco, JSW, and Epsilon Advanced Materials are contributing to manufacturing expansions in the U.S. These investments are expected to create thousands of high-quality jobs while strengthening economic interdependence.

Ensuring Energy Security

and Advancing Civil Nuclear Cooperation

Recognising the fundamental role of energy security in economic growth, the U.S. and India reaffirmed their commitment to ensuring stable energy markets through the US-India Energy Security Partnership. The U.S. committed to supporting India’s full membership in the International Energy Agency (IEA) while expanding trade in hydrocarbons, liquefied natural gas, and refined petroleum products.

In a landmark decision, both leaders agreed to accelerate the implementation of the U.S.-India 123 Civil Nuclear Agreement. India announced amendments to its Atomic Energy Act and the Civil Liability for Nuclear Damage Act (CLNDA), clearing the path for U.S.-designed nuclear reactors in India. This initiative aims to enhance India’s nuclear energy capacity through advanced small modular reactors and large-scale localization efforts.

Pioneering Technology

and Innovation through the TRUST Initiative

The leaders launched the “US-India TRUST (Transforming the Relationship Utilizing Strategic Technology) Initiative,” focused on cooperation in artificial intelligence, semiconductors, biotechnology, quantum computing, and space exploration. As part of this initiative, both governments pledged to develop the U.S.-India Roadmap on Accelerating AI Infrastructure, emphasizing partnerships in data centres, AI model development, and next-generation processors.

Under the INDUS Innovation platform, modelled after the successful INDUS-X defense technology initiative, industry and academia will collaborate on emerging technologies such as semiconductors, connected vehicles, and intelligent transportation systems. To support semiconductor manufacturing and critical mineral supply chains, both nations committed to launching the Strategic Mineral Recovery initiative, which will ensure the sustainable extraction and processing of rare earth materials.

Additionally, space collaboration was reinforced through NASA-ISRO initiatives, including the NISAR mission for Earth observation and plans for an Indian astronaut to visit the International Space Station (ISS) via AXIOM. Future cooperation in spaceflight safety, planetary exploration, and commercial space ventures will strengthen ties between the two nations’ space agencies and industries.

Advancing Regional and

Global Cooperation

As Quad partners, the U.S. and India underscored their commitment to a free, open, and peaceful Indo-Pacific. Prime Minister Modi invited President Trump to New Delhi for the upcoming Quad Leaders’ Summit, which will introduce new initiatives on humanitarian airlift capacity and maritime patrols.

Both nations resolved to deepen their cooperation with Middle Eastern partners through the India-Middle East-Europe Economic Corridor and the I2U2 group. The announcement of the Indian Ocean Strategic Venture signifies a whole-of-government approach to enhancing regional economic connectivity and security. Furthermore, investments in undersea digital infrastructure, such as Meta’s multi-billion-dollar submarine cable project, will expand digital access across the Indo-Pacific.

Counterterrorism

and Security Cooperation

Reaffirming their commitment to eradicating terrorism, the leaders pledged to intensify counterterrorism cooperation against groups such as Al-Qa’ida, ISIS, Lashkar-e-Tayyiba, and Jaish-e-Mohammad. The U.S. formally approved the extradition of Tahawwur Rana to India, reinforcing both countries’ commitment to justice. The leaders also urged Pakistan to take decisive action against terrorist organizations operating within its territory and to expedite prosecutions for perpetrators of the 26/11 Mumbai and Pathankot attacks.

Strengthening

People-to-People Ties

Recognising the vital role of student exchanges and professional mobility in bilateral relations, the leaders committed to enhancing educational collaborations. Over 300,000 Indian students contribute approximately $8 billion annually to the U.S. economy, fostering knowledge exchange and job creation. The expansion of joint degree programs and offshore campuses will further facilitate academic partnerships.

To address mobility challenges, both nations agreed to streamline visa processes for students and professionals while intensifying efforts to combat illegal immigration and human trafficking networks. Strengthened law enforcement cooperation will also target organized crime syndicates, drug cartels, and arms traffickers to ensure national security.

A Shared Vision for the Future

The U.S.-India relationship stands at a historic inflection point, shaped by shared values, economic synergies, and security imperatives. President Trump and Prime Minister Modi’s meeting laid the groundwork for a future-focused partnership, emphasising strategic autonomy, technological advancement, and global leadership. As both nations embark on this ambitious path, their commitment to prosperity, security, and democratic principles will define the trajectory of the 21st-century global order.