F-35s and $500 Billion: U.S.-India COMPACT Sets Lofty Goals

Indian Prime Minister Narendra Modi and U.S. President Donald Trump in February 2025 launched the "U.S.-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century" which ushered in a new era of strategic partnership between the two countries. The initiative is to introduce revolutionary changes in all aspects of high priority so their partnership is strengthened for the future.

One of the key priorities of the COMPACT is to increase trade and investment. The leaders have a ambitious vision to double bilateral trade to more than two times the current level at $500 billion by 2030. They will attempt this by negotiating an overall Bilateral Trade Agreement (BTA) by fall of 2025. The BTA will aim to enhance trade by enhancing market access, cutting tariffs and non-tariff barriers, and integrating supply chains more deeply. Progressive steps have indeed been initiated already to reduce barriers to trade, with India reducing tariffs on a limited range of American products and the U.S. increasing sales of Indian merchandise.

Cooperation in new and new-age emerging technologies is another thrust area highlighted in the COMPACT. Through the U.S.-India TRUST ("Transforming the Relationship Utilizing Strategic Technology") initiative, cooperation is to be advanced in defense, artificial intelligence, semiconductors, quantum computing, biotechnology, energy, and space. In the defense industry, the U.S. will continue to sell more military equipment to India, with proposals potentially involving cutting-edge F-35 fighter aircraft. They also formed the Autonomous Systems Industry Alliance (ASIA) to advance the co-development and co-production of sophisticated maritime drones and counter-drone systems, enhancing security in the Indo-Pacific further. This broad alliance reflects a common vision of putting national interests first and building prosperity and security together.