In an escalatory move amid tensions between the United States and India, US President Donald Trump imposed 50% tariffs on Indian exports to the United States, citing India’s continuous oil purchases from Russia. India is the second-largest buyer of Russian oil after China. Trump also recently urged the EU to impose up to 100% tariffs on China and India. These developments unfolded against the backdrop of growing unease over the state of India-US trade relations and the wider ramifications of escalating tensions for their strategic partnership.
Tensions between the two countries began to rise when Trump repeatedly claimed that the United States had mediated in the India-Pakistan escalation and subsequent ceasefire. The Indian government, adhering to its longstanding policy of rejecting third-party mediation, firmly denied these claims. The Trump administration has criticized India’s engagement with Russia earlier as well, and Indian officials have long argued the importance of oil imports from Russia for its energy security as well as its growing economy. Regarding Trump’s tariff policy, India’s Foreign Minister S. Jaishankar argued that the standards imposed on India have not been equally applied to China or the EU, both of which continue to import energy from Russia. Top officials from the Trump administration have contended that New Delhi is profiting by refining and exporting Moscow’s discounted oil. Recently, White House trade adviser Peter Navarro voiced doubts over India’s willingness to reorient its energy partnerships. “India doesn’t appear to want to recognize its role in the bloodshed. It simply doesn’t,” he said, indicating that the new tariffs would move forward as planned. He also warned that if India sides with Russia and China, “it won’t end well” for India. As per some recent reports, India canceled Defense Minister Rajnath Singh’s planned visit to Washington and reportedly paused discussions on major defense procurements. However, India rejected reports of halting talks, with the Ministry of Defense calling the reports “false and fabricated,” stressing that procurement was proceeding under existing procedures.
While the current strains reflect the broader unease that has marked India-US ties since Trump’s return to power, his targeting of India’s oil imports from Russia presents a particularly difficult challenge for New Delhi. Unlike its swift decision to stop oil imports from Iran following the Trump administration’s withdrawal from the JCPOA and reinstatement of sanctions, India has shown no signs of changing its policy on importing Russian oil. This is largely because Moscow remains not only a vital energy supplier but also a longstanding strategic and defense partner, making complete disengagement far more complicated. Also, India’s refining sector plays an important role in its economy, contributing nearly 15% to 20% of total exports. If tensions between India and the United States escalate further, it can affect India’s ambition to enhance its refining capacity. As per the International Energy Agency (IEA), India is set to become the fastest-growing market for oil consumption by 2030, with an increase in its refinery capacity. In 2023, India exported $86.28 billion worth of refined petroleum, ranking as the world’s second-largest exporter. Major buyers of these products include Europe, the United States and the UK.
The recent escalation has placed considerable pressure on the Indian government. New Delhi has sought to diplomatically manage the situation to prevent further deterioration, aware that a worsening trade dispute with Washington would severely impact India’s labor-intensive export sectors, threatening jobs and growth. As per reports, the Indian embassy in Washington has hired Mercury Public Affairs as a part of its lobbying efforts to ease tensions with the Trump administration.
India’s trade ties with the United States are critical, as the United States is the only big market where India consistently enjoys a substantial trade surplus. The United States has been a major destination for Indian exports, particularly in sectors like pharmaceuticals, jewelry and gems, electronics and textiles. Consequently, any US tariff measures directly threaten India’s export-driven gains, potentially eroding its competitive advantage and straining the broader bilateral economic partnership. Moreover, it is imperative for India to avoid escalating tensions with the United States, given that in recent years, New Delhi has actively sought deeper defense cooperation and a broader strategic partnership with Washington. The United States, too, cannot afford to sideline India, which it sees as a strategic counterweight to China in the Indo-Pacific. For the United States, pressing India too hard risks being counterproductive. On the other hand, India cannot afford to alienate Russia, which has been its longstanding partner in defense and energy.
Domestically, Prime Minister Narendra Modi faces political scrutiny, with opposition parties accusing him of being overly deferential to the Trump administration, a criticism that resonates strongly given Modi’s past reliance on foreign policy achievements to bolster his electoral campaigns. His high-profile embrace of Trump during previous visits, including the widely publicized “Namaste Trump” event, has only sharpened this criticism, as the imposition of tariffs now undercuts the very narrative of successful personal diplomacy. Both domestically and internationally, the Modi government has to demonstrate that it is managing external pressure effectively without compromising India’s autonomy. This was evident in Modi’s participation at the recent SCO summit. Although the meeting served other purposes as well, by engaging with Russia and China on the same platform, India sought to underscore its commitment to strategic autonomy and signal its refusal to be seen as aligned exclusively with the West.
In the larger geopolitical context, India and the United States share broader and deeper convergences that serve as the foundation of their bilateral relations. India’s longstanding border dispute with China, Beijing’s support for Pakistan and its aggressive posture in the Indo-Pacific are all areas of strategic concern for New Delhi, and a lot of these concerns are shared by the United States as well. These enduring geopolitical realities form the structural foundation of India-US ties, ensuring that even in moments of turbulence, convergence outweighs divergences and differences.
However, repeated episodes of economic coercion and tariff escalations risk eroding trust in the partnership. For India, such measures raise doubts about the reliability of the United States as a strategic partner, complicating its calculus and pushing it to hedge more assertively. The longer these tensions persist, the more they risk undermining the credibility of US commitments in Asia, while reinforcing India’s will to preserve and assert its strategic autonomy in an increasingly multipolar order.
Trump recently announced on Truth Social that India and the United States are resuming trade talks, striking an optimistic tone echoed by New Delhi. This signals a tactical de-escalation, with Washington aiming to preserve leverage even as India seeks to balance its strategic autonomy with mounting economic pressures. In the current context, New Delhi is unlikely to yield to Trump’s pressure and will instead continue exploring diplomatic avenues to manage the situation. India is expected to continue negotiations with Washington and work out a trade deal. India’s handling of this standoff will be closely watched by other powers, many of whom may read it as a test case of how far the United States could push its allies and partners and the extent and implications of US pressure on a major regional partner.
