The price of flattery: how Modis bad bet on America has cost India

Five years ago, in the mid June of 2020, with Indian and Chinese troops locked in a deadly standoff in the Galwan valley of Ladakh, I warned India of the strategic myopia guiding Prime Minister Narendra Modi’s China policy in my Asia Times column. My core argument was that Modi’s overt alignment with the United States, mistaking theatrical personal bonhomie diplomacy between US President Donald Trump and Modi for substantive statecraft, would reap a bitter harvest in the future. Today, in January 2026, that harvest has arrived, and it is remarkably sour. A recent, stunningly candid admission by US Commerce Secretary Howard Lutnick has laid bare the fragility of Modi’s American gambit and the high price of building a foreign policy on the shifting sands of personal chemistry between Modi and Trump and geopolitical flattery.

On June 17, 2020, following the June 15 deadly skirmishes, I argued that Modi’s “Howdy Modi” and “Namaste Trump” spectacle, while feeding a domestic narrative of global prestige, was a high-risk strategy for India. India, I contended, was neither a superpower nor a fully developed middle power, and it could ill afford to antagonize a powerful Northern neighbor, China, while banking on untrustworthy American favour. The core assumption of Modi’s strategic aides—that the US-China rivalry presented a historic “transfer opportunity” for capital, technology, and preferential access to the US market for Indian goods and services, as well as geopolitical patronage for India—was deemed too simplistic and dangerously false. It provoked China, eroded strategic autonomy of India, and led to the assumption that America would unconditionally underwrite India’s security in the Indian ocean rimland or economic ambitions of next powerhouse of manufacturing in the world.

The proof now sits not in the high Himalayas, but in the stalled corridors of trade negotiation. The Commerce Secretary Lutnick’s revelation is a diplomatic bombshell: a prepared US-India trade deal was shelved because “Prime Minister Modi did not call Trump.” He added, with damning clarity, “They [India] were uncomfortable with it. So, Modi did not call.” This statement is not merely about a missed phone call; it is a stark metaphor for the entire failed premise of Modi’s US-centric outreach after he inclined with the US. It reveals a relationship in which an imagined personal bond was supposed to circumvent hard national interests, and in which India’s perceived reluctance to perform a symbolic act of deference derailed tangible economic benefits. The “train,” as Lutnick put it, “had left the station.”

Modi’s mirage of special privilege

Modi’s bet was multifaceted. It envisioned privileged access to the American market, a wave of technology transfers, massive investment, and the great relocation of supply chains from China to India under the banner of “Atmanirbhar Bharat” (Self-Reliant India). My 2020 article noted that even after the US-China trade war began, fewer than 5 percent of firms had planned to exit China. Today, that mirage of India has fully evaporated as the US turned to a complete protectionism.

US-India trade has grown to approximately $132 billion, but the trajectory is worrying. India’s exports to the US fell by 8.58 per cent year-on-year in October 2025, a direct hit from the resurgent protectionism of the Trump administration. The threat of punitive tariffs—including potential 500 per cent levies on nations buying Russian oil—hangs over the Indian economy like a sword. The promised deluge of American companies leaving China for India remains a trickle. The “special relationship” has yielded not a strategic economic partnership, but heightened vulnerability to American domestic politics.

The cost of flattery and strategic misreading

This outcome stems from a fundamental misreading of American intent and capacity and an intoxication with flattery. The Modi team seemed to believe the effusive praise for Modi from Washington—the “extraordinary leader,” the “true friend”—signaled a unique bond between Modi and Trump. As I warned in 2020, every alliance has a price, a concept economist succinctly term “there ain’t no such thing as a free lunch.” I wrote that, even for Russia, it was $4.3 billion for the S-400 missile defense system, and for France, $3 billion for the Rafale jets for India. But the strategic price tag for the American embrace was always more ambiguous and potentially more costly than Modi imagined.

India sought to leverage US-China trade tensions in Trump’s first term, a move I described then as “risky, if not ridiculous.” The assumption was that a democratic, counter-China “frontline state” would be nurtured and accommodated. Instead, it has found itself pressured to conform to American demands—on trade, on Russian oil, on its strategic choices—with high diminishing returns. The Ladakh standoff, where neither the Quad nor Washington offered meaningful military intervention, was the first cold shower. The suspended trade deal is the latest, and more yet to come, proving that in a transactional “America First” world, even frontline states must pay retail price, and on the buyer’s terms.

A two-front strategic squeeze

The tragedy of this miscalculation is that it has weakened India on both its strategic flanks. With China, the relationship is frozen in a state of hostile coexistence, with no sign of returning to normal very soon. The opportunity costs are enormous: lost of trade opperunity, perpetual quandering scarce resources on military along a vast border, and exclusion from regional economic frameworks like Regional Comprehensive Economic Partnership(RCEP). My 2020 warning that China could punish India more severely than in 1962 if agreements were broken has materialized not in a hot war, but in a sustained, costly pressure campaign for Inida in which America has provided no strategic balm.

With the US, India now faces a patron that is impatient, protectionist, and demanding of concrete concessions. The hoped-for transfer of technology and capital is held hostage to a mercantilist calculus. The “free and open Indo-Pacific” looks increasingly like an American-dominated one, where allies are expected to bear the burden and open their markets for costly American farm products, arms, and obsolete nuclear technology. India is caught between a rock and a hard place: unable to reset relations with Beijing without appearing to capitulate, and unable to extract its expected dividends from Washington without sacrificing economic and strategic autonomy.

Toward a balanced realism

The lesson of the last five years is not that India’s engagement with the US is absolutely wrong, but that basing it on a foundation of personal diplomacy and the illusion of “exceptionalism” is a recipe for disappointment. My 2020 article argued for a return to the core principle of Nehruvian non-alignment: true strategic autonomy. This does not mean India’s isolation, but a hard-headed, multi-aligned realism, based on real assessment of India’s economic and military hard power. It means engaging some extend with the US where interests converge— such as in technology, in selective supply chain integration—without fantasies of a grand alliance against Northern neighbor. It means steadily mending fences in Europe, engaging ASEAN countries more robustly, and, crucially, engaging economically and strategically with Beijing, while being open to managing the border dispute through dialogue and diplomacy, and to meaningful participation with the BRICS+ nations.

India’s destiny as a leading middle power will be forged not by being a junior partner in any alliance, but by becoming a true swing state—a balancer whose primary allegiance is to its own developmental and security and strategic needs. This requires a foreign policy less invested in spectacle and more in the quiet, grinding work of diplomacy; less in personal chemistry and more in institutional statecraft.

History does not teach us, but it punishes those who fail to learn its hard lessons. The suspended trade deal and Lutnick’s blunt words are punishment for India’s strategic misadventure born of hubris. The price for Modi’s myopic China strategy in 2020, it turns out, is not paid only to Beijing. A hefty invoice has arrived from Washington, one that India, with its still-developing economy and unresolved security challenges, can ill afford. The task now is to jettison the illusions, recalibrate towards pragmatic multi-alignment, and reclaim the strategic autonomy that is the right of every great civilizational state. The alternative is a future of perpetual strategic squeeze, where India pays premiums to both its rivals and its supposed partners.

Bhim Bhurtel is on X at@BhimBhurtel