America’s Innovation Advantage Over China Depends on Its Partnership With India, Tariffs Put That at Risk

For decades, the United States has maintained a decisive advantage in global innovation, not by operating in isolation, but by integrating global talent into an ecosystem of capital, platforms, and institutions that amplify human ingenuity at scale. This model now faces its most serious test. As competition with China intensifies across artificial intelligence, advanced technology, and space, a critical question emerges. If China is America’s primary innovation rival, why is U.S. policy drifting toward isolating India, its most important innovation partner?

China has built a largely self-contained innovation engine. It trains engineers domestically, aligns them through state-directed industrial policy, and deploys them across strategic sectors ranging from AI to aerospace. The United States has followed a fundamentally different, and historically more successful, path. Its innovation leadership rests on openness, attracting, integrating, and elevating global talent within American companies, research institutions, and platforms.

At the center of that model sits India.

Indian engineers are not peripheral contributors to U.S. technological leadership, they are foundational. They power core engineering teams at leading American technology companies, drive advances in AI and cloud infrastructure, and increasingly shape product and platform strategy. This is not outsourcing in the traditional sense. It is co-creation of American technological advantage.

The same dynamic is now visible in space.

U.S. and India space collaboration has accelerated markedly in recent years, spanning satellite technology, launch services, Earth observation, and human spaceflight. Joint missions, technology sharing, and growing interoperability between the two countries’ space agencies reflect a deeper truth. Space, like AI, is no longer a purely national endeavor. It is a domain where innovation depends on trusted partnerships, shared talent, and complementary strengths. India brings cost-efficient engineering, systems reliability, and a rapidly maturing space ecosystem. The United States brings scale, capital, and frontier research. Together, they generate outcomes neither could achieve alone.

This matters because space is no longer only about exploration. It is about data infrastructure, communications, national security, climate monitoring, and economic competitiveness. Weakening collaboration with India in this domain would not slow China. It would handicap the United States.

It is also important to acknowledge a historical truth that continues to shape global innovation dynamics. For much of the past three decades, China’s rise was accompanied by widespread disregard for intellectual property protections, particularly in software, manufacturing design, and advanced technologies. That legacy eroded trust and constrained deep collaboration with U.S. and allied innovation ecosystems. However, this posture is evolving. As China increasingly generates its own frontier technologies, particularly in AI, hardware, and space, it has begun to recognize that protecting intellectual property is not merely a concession to the West, but a prerequisite for sustaining its own innovation leadership.

In this sense, China’s trajectory is diverging from that of the United States and India. China is moving toward a more self-contained, domestically protected innovation model. The U.S. and India partnership, by contrast, remains anchored in open collaboration, talent mobility, and shared value creation. Conflating these two fundamentally different paths risks undermining the very model that has historically delivered America its greatest innovation advantage.

Yet current trade and tariff impulses risk doing exactly that. Tariffs are blunt instruments designed for a twentieth-century, goods-based economy. Innovation today is driven by services, intellectual property, software, data, and, above all, human capital. When policy constrains collaboration with India, it does not punish a rival. It taxes America’s own innovation engine.

The contrast with China is instructive. China can pursue decoupling because it has invested heavily in domestic engineering pipelines. The United States has not, and should not, attempt to replicate that closed model. Its comparative advantage lies precisely in its ability to orchestrate global talent networks and convert them into scalable platforms. Undermining that openness in the name of protection weakens the very firms and institutions that anchor U.S. leadership in AI, space, and advanced technology.

There is also a fundamental category error at play. India is not China. It is a democracy, a geopolitical partner, and a deeply embedded contributor to U.S. innovation systems. Indian engineers do not merely work for American companies, they increasingly lead them. In technology, R and D, and space alike, India is a collaborator in building American advantage, not a competitor eroding it.

The deeper issue is that much of U.S. trade policy remains anchored in an industrial-era mindset, focused on physical goods, tariffs, and borders, while innovation power has shifted to talent mobility, platform economics, and services-led growth. In this new reality, the most important supply chain is human. You cannot tariff your way to technological leadership.

If the United States is serious about competing with China across AI, space, and frontier technologies, the path forward is not isolation. It is deeper integration with trusted partners who expand, rather than constrain, America’s innovation capacity. India sits at the center of that strategy.

The choice is clear. America can retreat into fortress thinking, slowing innovation in the name of control. Or it can double down on the model that has delivered decades of leadership, open talent markets, services-driven growth, and strategic partnerships, from Silicon Valley to Bangalore, from AI labs to space launchpads. In a world where innovation defines power, weakening your own ecosystem is the one mistake you cannot afford.

By Kevin S. Parikh, Chairman & CEO, Avasant