For over two decades, successive U.S. administrations built a policy framework that positioned India as the cornerstone of the Indo-Pacific strategy. The underlying calculation was straightforward: as the world’s most populous democracy with an expanding economy and growing military capabilities, India could serve as a counterweight to China. However, recent geopolitical developments have exposed significant cracks in this narrative, forcing Washington to reconsider the strategic bet.
The Pahalgam Crisis of May 2025 served as a watershed moment. Pakistan’s tactical success in downing multiple Indian jets — including high-profile Rafales — punctured the myth of Indian air superiority. More troubling for U.S. strategists, this raised uncomfortable questions about India’s ability to contain even its immediate neighbor, let alone counterbalance a peer competitor like China. Pakistan’s resilience, coupled with deft diplomatic maneuvering, has ensured that the Kashmir issue is once again firmly on the international agenda — a clear setback for India’s longstanding policy of bilateralism.
Pakistan’s Repositioning and India’s Democratic Recession
In contrast to India’s struggles, Pakistan has made incremental gains in its international image. CENTCOM’s public acknowledgment of Pakistan’s sacrifices in the global fight against terrorism has subtly shifted Washington’s tone. Pakistan is increasingly seen not merely as a security concern but as a potential stabilizing actor. This perception is reinforced by Islamabad’s ability to navigate complex partnerships — engaging constructively with the U.S. while maintaining deep strategic ties with China.
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Meanwhile, India’s internal trajectory is undermining its soft power appeal. Democratic backsliding, suppression of minorities, curbs on press freedom, and allegations of extraterritorial assassinations are eroding its moral standing. For Washington, which often frames its alliances in the language of democratic values, continued endorsement of India’s domestic policies risks deepening accusations of hypocrisy. Trump’s openness to mediate on Kashmir — once an untouchable subject for Washington — underscores the erosion of New Delhi’s diplomatic insulation.
Economic Fractures and Strategic Drift
The Trump administration’s abrupt tariff hikes on Indian exports — now at 50 percent — have brought economic tensions to the fore. More consequentially, defense procurements have stalled, with talks on Stryker combat vehicles, Javelin anti-tank missiles, and P8I reconnaissance aircraft delayed or cancelled. While New Delhi denies an official pause, the symbolism is unmistakable: the once-rapidly expanding defense partnership is entering a phase of hesitation.
The economic confrontation is compounded by strategic incoherence. Washington’s preferential outreach to Pakistan, including favorable tariff rates and mineral cooperation agreements, has stung New Delhi. The optics of Trump hosting Pakistan’s army chief weeks after a deadly terrorist attack in Pahalgam — and granting Islamabad a 19 percent tariff rate — have been politically toxic for Modi’s government.
This shift comes as India faces strained ties with Russia over oil trade, cautious diplomatic overtures to China, and growing skepticism in the West over its reliability as a security partner. The United States, which once viewed India as indispensable to Indo-Pacific stability, may now be recalibrating toward a more distributed regional strategy in which Pakistan re-emerges as a balancing player.
The U.S.-India strategic partnership is entering its most uncertain phase since the early 2000s. Washington’s faith in India as a democratic bulwark and military counterweight to China is being tested by India’s inability to decisively manage its regional conflicts, its tarnished democratic image, and its economic friction with the U.S. While India still holds strategic value, the monopoly it once enjoyed in U.S. South Asia policy is fading. In this shifting equation, Pakistan’s tactical successes, diplomatic agility, and alignment with China — coupled with selective cooperation with Washington — position it as a more influential actor than many in New Delhi would like to admit.