Reputational damage
US President Donald Trump is on a high. Against considerable political odds and widespread scepticism, he has pushed through his controversial but most desired law – the One Big Beautiful Bill. It scraped past by just one vote in the Senate and four in the Congress.
Opponents expect dire economic problems for poor and middle-class Americans and an economic recession by this year end, because of the huge tax breaks it contains for seriously rich Americans, gigantic investments on the military and expelling undesired immigrants and deep cuts to health care, social welfare and aid to the poor.
But Trump sees it as the cornerstone of his legacy, claim to historical importance and the vital trampoline for a solemn promise he made at his presidential inauguration to embed Americans in an unprecedented Golden Age. He promised soaring prosperity, global economic and military leadership and brilliant technological innovations for a glorious period extending far into the future.
For India, it opens a period of economic and security uncertainties that could sharply slow down its own rise towards becoming a developed country by 2047 – the 100-year anniversary of independence, one of the main reasons for it being Trump’s seemingly irrational trust in punitive import tariffs on almost all countries, including at least 26 per cent on imports from India, as his main tool to bring in huge funds to pay for the bill’s massive spending, while also reducing taxes.
The apolitical US Congressional Budget Office estimates that the 887-page bill will add about $3.4 trillion to the federal deficit over the next 10 years and remove health insurance from nearly 12 million US residents. Government debt, already at over $36 trillion, could also explode.
Diehard Trump supporters expect a Golden Age but almost everyone else apprehends a recession or severe economic instability in the US, since the bill will cut 18 per cent in health care funding and 20 per cent in food subsidies used by than 40 million low-income Americans.
Indian prosperity would be exceptionally hurt if the US economy slides into chaos, while hammering Delhi with tariffs, other financial and trade restrictions and coercion to stand with Trump in his economic and military rivalry with China, Russia and Iran. The central problem is that no quantity of bilateral negotiations will safeguard India, because almost all countries, including America’s most loyal allies in the European Union, will also be reeling under his demands making the entire world economy unstable.
Delhi could also find itself on the wrong side of Trump’s Middle East policies, particularly his unconditional support and friendship with Israel’s Benyamin Netanyahu. The risk of reputational damage to Prime Minister Narendra Modi could be severe since, on 3 July 2025, a UN Human Rights Rapporteur described Netanyahu's military devastation of Gaza thus: “The situation in the occupied Palestinian territory is apocalyptic. Israel is responsible for one of the cruellest genocides in modern history.”
“In the past 21 months, while Israel’s genocide has devastated Palestinian lives and landscapes, the Tel Aviv stock exchange soared by 213 per cent, amassing $225.7 billion in market gains – including $67.8 billion in the past month alone,” rapporteur Francesca Albanese added. “One people enriched, one people erased!”
Israel and its supporters reject her report as being legally groundless, defamatory and a flagrant abuse of her office. But, most countries, including many in Europe, see it as an unbiased assessment of Israel’s extra-ordinarily violence against Gaza in exercise of the right of self-defence. It followed a heinous terrorist invasion of Israel by Gaza’s Hamas on 7 October 2023, when 1,200 people were killed and more than 250 kidnapped and hidden inside Gaza. An increasingly frustrated Netanyahu has made almost all of Gaza’s 2.3 million people homeless and made the strip uninhabitable. Critics now accuse him of using starvation as a weapon of war against civilians.
Modi has refrained from criticising Netanyahu and has stood by him with steadfast loyalty. Trump is trying to force Netanyahu and Hamas to agree on a truce that turns into a permanent peace after Hamas hands over all the hostages, living and dead. If he succeeds, international observers and investigative reporters will flock into Gaza and Netanyahu will no longer be able to hide the evidence of Israeli violence.
That’s when reputational damage will mount for Modi and his assertions about India being a thought leader on peace, equality and prosperity could face ridicule.