Shock and disappointment pervade policy circles in India following U.S. President Donald Trump’s decision to impose a 50 percent tariff on Indian exports to the United States. Although India has reacted cautiously with its “wait and watch” policy so far, it is expected that a more assertive response will emerge in the coming days and weeks.
India and the United States have shared strong strategic ties for more than two decades. Despite highs and lows, the two countries have navigated their strategic partnership in the realm of security, space, trade, energy and technology. Trump’s tariff decision has the potential to derail a relationship built through years of negotiations and investment by both sides.
Trump’s announcement on August 6 added a 25 percent secondary tariff on Indian exports for buying Russian oil to the 25 percent announced earlier on July 29. India now finds itself clubbed with Brazil, also hit with a 50 percent tariff rate. Trump supposedly lacks personal chemistry with current Brazilian President Luiz Inácio Lula da Silva and has sanctioned the judge who is overseeing the investigations against former President Jair Bolsonaro.
But Indian Prime Minister Narendra Modi was thought to be in a different league. He shared a great personal rapport with Trump during the latter’s first term. On the eve of Trump’s inauguration in January 2025, Modi posted a warm congratulatory message on his X account for his “dear friend,” looking forward to “working closely together once again.”
Even though Modi wasn’t invited to the inauguration, unlike some other world leaders including Chinese President Xi Jinping, there was optimism and energy in the power corridors of New Delhi that the challenging four years of working with Democrats were over, and Indo-U.S. ties would reenter a new, bold phase unhinged from the Biden administration’s frequent criticism of the diminishing religious and press freedom. Foreign Minister S. Jaishankar attended Trump’s second inauguration. Modi himself travelled to Washington D.C. after being invited by Trump in February. There was a brief handshake between Trump and Modi during the G-7 summit in Canada, where he reportedly declined Trump’s off-the-cuff invitation to visit the United States, citing existing plans.
India plunged into the fray of deal-making on tariffs and hoped to be among the first to sign a trade deal with the United States. Vice President J. D. Vance confirmed the possibility of an early conclusion of such a deal during his unofficial India trip in May. India also hoped that, in exchange for defense purchases from the United States, it could remain the linchpin of the American Indo-Pacific strategy and evade punitive sanctions on its exports. After all, what are strategic partners and friends for?
Indian diplomats, it now appears, grossly overestimated their optimism while not taking seriously enough the shifting dynamics and structural constraints that were bound to create roadblocks. Without their notice, the man they were trying to win over changed in his years away from office. “Make America Great Again” (MAGA) — a nationalist approach — overtook the priorities that New Delhi thought were crucial to keeping the bond strong with the United States. New Delhi had several opportunities to confirm Trump’s repeated claims of being a successful peace mediator in ending the Indo-Pak brief war in May. But it chose to repudiate him, apprehensive of the negative political fallout of internationalizing the Kashmir issue and its implications on domestic electoral politics, particularly the upcoming state elections in Bihar. India’s relationship with Russia, Iran, and BRICS appear to be other stumbling blocks in its relationship with the U.S.
Pakistan, on the other hand, played its hand astutely, not only by acknowledging Trump’s role, but also by nominating him for the Nobel Peace Prize. That earned the Pakistani military chief a lunch in the White House. India was peeved, but chose to remain silent in the face of growing U.S.-Pakistan camaraderie. While the government was upbeat, relishing the American decision to ban The Resistance Front (TRF), allegedly responsible for the terror attack in Kashmir in April 2025, to analysts, it was obvious that Indo-U.S. relations were headed downhill. Interestingly, with Pakistan now being wooed by both the U.S. and China, the Trump administration may be hoping to get Islamabad out of Beijing’s embrace.
India signed a free trade agreement with the U.K. in July, while a host of countries like Japan, U.K, Indonesia and even Pakistan concluded deals with the U.S. India dug deep to protect its farm and dairy industries, despite U.S. pressures for access. The Americans dubbed the Indians “ tough negotiators” for denying access to Indian markets, while the Indian Commerce Ministry was lauding itself for protecting the national interest. New Delhi still hoped for relief and signed an interim deal. But with an unbridgeable and growing divide between the two sides, even that arrangement wasn’t feasible.
New Delhi responded aggressively to the charges of its buying Russian oil, accusing both Europe and the U.S. of doing similar purchases of fertilizers and other items from Moscow. And then came the announcements on July 29 by Trump and his extra punch on August 6.
The impact of the tariff on India’s pharmaceutical, jewelry, petrochemicals, textiles, leather, and gem industries can be devastating, cutting down growth, resulting in mass unemployment, and hitting foreign currency reserves. The net impact could also be on Modi’s political fortunes. The prime minister has spoken twice in the past week, vaguely invoking the spirit of buying local produce and declaring that he is “ready to pay a personal price to protect the interests of the farmers, livestock holders and fishermen.” The official response to Trump’s announcements hasn’t gone beyond expressions like “unfair,” “unreasonable,” “disappointing,” and “extremely unjustified.”
While these hardly indicate what New Delhi’s final official response will be, a plethora of advice has been heaped on policymakers by analysts and industry leaders. While a few suggest retaliation, most advocate that India seek alternatives and pursue its policy of strategic autonomy, without yielding to American pressure. On August 7, India’s National Security Advisor Ajit Doval met with Russian officials to prepare for President Vladimir Putin’s long-planned visit to New Delhi this year. “The current escalation of the geopolitical situation will also be discussed. Apart from that, the topics will include such pressing matters as supplies of Russian oil [to India],” Russia’s official TASS news agency reported, quoting an unnamed Indian source. In late August, Modi is also expected to travel to China to attend the Shanghai Cooperation Organization (SCO) summit. A bilateral meeting with Xi Jinping could be on the agenda.
However, whether India is reaching out to new partners to offset the negative implications of the tariffs or reorient its foreign policy moorings at a time of changing global order remains to be seen. Despite warming ties with China, a sea of distrust over the boundary question and its close relationship with Pakistan continues to divide both countries.
Sanctions-ridden Russia isn’t an ideal replacement for the strong strategic ties built over the past years with the United States. Chinese exports have reportedly surged again, through their increased shipping to Southeast Asian and other regions that often re-export them to the United States.
India may look to adopt a similar strategy, but replacing and diversifying $87 billion worth of exports to the U.S. will not be easy. In the strategic sphere, India has invested tremendously in building strong ties with the U.S.; unraveling those bonds would be a challenge in the short to medium term.
New Delhi likely hopes that this phase of uncertainty is only temporary, and the negative fallout of the tariff regime will motivate Trump to renounce it in the coming months. India still hopes to host Trump for the Quad summit this year and win him over. Until then, quiet backroom negotiations will have to take precedence over the sense of blind optimism that characterized Indian diplomacy in recent years. Ultimately, India has to get back to the blackboard to work on the structural constraints, streamline processes, and institutionalize mechanisms to retrieve a doomed relationship.