Even as the United States has implemented a 50 percent tariff on India, the highest among all countries so far and a measure that will strain their relationship to its lowest point in years, it is evident that US President Donald Trump is more focused on onshoring rather than friend-shoring, according to experts.
This week, the US imposed an additional 25 percent tariff on India due to its import of Russian oil, bringing the total to 50 percent. This move caught many experts off guard, as New Delhi was one of the first to initiate trade negotiations with Washington, DC, and Trump and Indian Prime Minister Narendra Modi have both publicly admired each other and referred to each other as friends. Brazil is the only other country facing tariffs as high as India’s.
“The breakdown of the trade negotiations was a surprise,” stated Vina Nadjibulla, vice president of strategy and research at the Asia Pacific Foundation of Canada.
“This is a very difficult moment, arguably the worst in many, many years [in their relationship], and it puts India in a very small group of countries that find themselves without a deal and with the highest tariff rates. They now need some pragmatic path forward and need to find a way to rebuild trust,” Nadjibulla added.
While the 50 percent tariffs, set to take effect in three weeks, have come as a shock, there have been a series of events in the past few weeks that hinted at disagreements between the two countries. Just last week, Trump threatened to penalize New Delhi for buying Russian oil and arms and referred to both countries as “dead economies.”
Bilateral trade between India and the US stood at approximately $212bn last year, with a trade gap of about $46bn in India’s favor. Modi has said in the past that he plans to more than double trade between the two countries to $500bn in the next five years.
As part of the tariff negotiations, New Delhi had offered to remove levies from US industrial goods and increase defence and energy purchases. However, it refused to remove duties from farm and dairy products, two politically sensitive sectors that employ hundreds of millions of predominantly poor Indians.
India has called Wednesday’s tariff “unfair, unjustified, and unreasonable” and stated that its imports of Russian oil are based on its objective of securing the energy needs of its 1.4 billion people.
New Delhi is now trying to navigate a difficult road and strengthen its bilateral trade agreements. It has signed a free-trade agreement with the United Kingdom last month and is working on another with the European Union.
India is also seeking to stabilize relations with China, a move similar to that made by Australia, Canada, and Japan in recent months after Trump took office and imposed tariffs on allies.
However, the trade blow from the US also comes at a time when India has been trying to position itself as a manufacturing hub and an option for businesses looking to add locations outside China. A country with a 50 percent tariff tag is hardly attractive for business, and this only adds to the instability and uncertainty that businesses were already feeling due to all the Trump tariffs.
Source: https://www.aljazeera.com/news/2025/8/7/us-india-relations-at-their-worst-as-trump-slaps-50-percent-tariff?traffic_source=rss
