What Does Trump's New Defense Bill Mean for US-India Relations?

Strengthening Ties with India

New York/Washington: President Donald Trump has enacted a defense policy bill that emphasizes enhancing the United States' collaboration with India, particularly through the Quad, to promote a free and open Indo-Pacific region while addressing challenges from China.

The National Defense Authorization Act for Fiscal Year 2026, which was signed into law on Thursday, mandates the Secretary of State to create and sustain a joint consultative mechanism with the Indian government as part of the US-India Strategic Security Dialogue concerning Nuclear Liability Rules.

This legislation allocates funding for various departments, including the Department of War (DoW), the Department of Energy's national security programs, and the Department of Homeland Security, among others.

In a statement, Trump remarked, “This Act will empower the DoW to implement my Peace Through Strength agenda, safeguard the homeland from both domestic and foreign threats, and bolster the defense industrial base while cutting funding for ineffective and radical programs that compromise the warfighting spirit of our military personnel.”

The Act also expresses Congress's stance on defense alliances and partnerships in the Indo-Pacific region.

It instructs the Secretary of Defense to persist in efforts that enhance US defense alliances and partnerships in the Indo-Pacific to strengthen the US's competitive edge against China.

This includes expanding US engagement with India through the Quadrilateral Security Dialogue, aiming for a free and open Indo-Pacific region via bilateral and multilateral interactions, military exercises, increased defense trade, and cooperation on humanitarian aid and disaster response, as well as maritime security.

Established in 2017, the Quad, which includes India, the US, Japan, and Australia, was formed to counter China's assertive actions in the Indo-Pacific.

The Act requires the Secretary of Defense, in collaboration with the Secretary of State, to initiate a security initiative aimed at enhancing cooperation among the defense industrial sectors of the US and its allies and partners in the Indo-Pacific.

This initiative is designed to fortify the collective defense industrial base by improving capabilities, capacities, and workforce, while also enhancing supply chain security and interoperability among participating nations.

The two Secretaries will determine which allies and partners, including Australia, Japan, South Korea, India, the Philippines, and New Zealand, will be invited to join this security initiative.

A section titled ‘Joint Assessment Between The United States And India On Nuclear Liability Rules’ specifies that the Secretary of State will establish a consultative mechanism with the Indian government within the US-India Strategic Security Dialogue.

This mechanism will convene regularly to evaluate the implementation of the 2008 Agreement for Cooperation between the US and India regarding peaceful nuclear energy uses.

The focus will be on aligning India's domestic nuclear liability rules with international standards and developing strategies for bilateral and multilateral diplomatic engagements related to these opportunities.

The Secretary of State is required to submit a report detailing the joint assessment within 180 days of the Act's enactment and annually for the next five years.

Additionally, the Act defines an “ally or partner nation” as any country that is a member of the Organisation for Economic Cooperation and Development, including India, and any country designated as such by the Secretary of State.