The past one year has upended all the presumptions that India may have had regarding its long-standing strategic partnership with the United States. Despite the periodic reaffirmation of special relations between the world’s oldest and largest democracies and strong personal friendship of the leaders of both nations, there has been a downturn in bilateral ties that cannot be papered over.

For starters, US President Donald Trump slapped one of the highest reciprocal plus penal tariffs (25% +25%) on India for buying Russian oil. If a putative US-India interim trade deal is considered within a single percentage point of being finalised, the question naturally is, why is it taking more time?

If only “small issues, commas, and full stops” — to borrow an expression of India’s Commerce and Industry Minister, Piyush Goyal — remain to be addressed, why is the new tariff architecture of the deal highly uncertain? Trump’s reciprocal levies invoking the International Emergency Economic Powers Act have been invalidated by the US Supreme Court.

To retain leverage in trade negotiations, he imposed a 150-day uniform tariff of 10% which expires on July 24 and the United States Trade Representative (USTR) has launched investigations under Section 301 of Trade Act of 1974. A team of officials led by Brendan Lynch are now in New Delhi to commence negotiations.

The US is reportedly pressing India to accept a package locking in tariffs that were agreed to in a framework deal on February 2. The US agreed to reduce reciprocal tariffs from 25% to 18% and remove the penal rate for buying Russian oil. In return, India undertook to reduce tariffs on US industrial and agricultural products with firm red lines on not allowing genetically modified maize and soya bean and dairy items.

Clinching an early interim trade deal with 18% tariffs will perhaps be acceptable to India provided there are assurances that penalties will not be added after Section 301 investigations on excess capacities and forced labour, the legal basis of which India is strongly contesting.

India also has serious concerns regarding its relative competitive position. How does its interim trade deal compare with competitors like Vietnam, Indonesia, Bangladesh, and Pakistan?

Equally challenging are what Indian officials describe as “unconventional US demands”, which include an “intention” of buying $500 billion of US energy, information and communications technology, and other products — which came up in the February 2 agreement — that was reiterated as a “commitment” by US Secretary of State Marco Rubio when he recently visited India to defuse bilateral tensions.

Even though it is not in our national interest, India has not challenged this assertion of Rubio. Trump’s anti-immigration stance has also impacted India. It is not the deportation of illegal Indian immigrants that is worrisome but the restraints on the legal mobility of our students and professionals who chase the American dream.

The falling intake in Ivy League universities, limitations on H1-B visas, and the case-by-case discretion in deciding which immigrants should return to their home countries to apply for green cards shut down the pathways for Indians seeking a future in the US. Rubio offered only a weak defence that “we are modernising the US immigrant system for the 21st century” and that such a policy stance does not specifically target only Indians.

US-India tensions represent a setback to the bipartisan consensus in Washington for closer ties between the two largest democracies. This has been the case since the then President Bill Clinton visited India in 2000, the first US leader to do so in 22 years.

To be sure, bilateral ties have passed through several twists and turns as post-Independent India allied with the erstwhile Soviet Union. After several decades of being “estranged democracies”, the US and India later became “engaged democracies”, especially under the Bush administration between 2001 and 2009 during which a landmark agreement on civilian nuclear cooperation was signed.

Progress continued since then with successive US administrations, including that of Joseph Biden who described India-US relations as the “defining relationship of the 21st century”. An important factor that elevated India’s importance in US’s strategic priorities was to contain the rise of China that poses a hegemonic challenge to Pax Americana. But times are a-changing under the Trump administration.

The atmospherics of Trump’s visit to China — the first visit by a US President in nine years — and his meetings with his counterpart, Xi Jinping, to pursue constructive “strategic stability” clearly indicated the shifting Sino-US balance of power that has major implications for India.

With greater strategic accommodation between the US and China, India would have to realistically factor in the prospect of greater threats on its northern border from the fiery dragon. Like the US, China will use more coercive measures on an economically weaker India like it is already doing by blocking shipments of rare earths, fertilisers, and tunnel boring equipment.

With the Trump administration also re-hyphenating India-Pakistan relationships there is a clear and present danger of a serious two-front threat on India’s borders. Navigating the downtrend in US-India ties due to a highly unpredictable US President is indeed our biggest strategic challenge.

The writer is an economics and business commentator based in New Delhi.

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.