America’s tariff war and the unravelling of Indo-US ties

India’s long-standing friendship with the United States has taken a dramatic turn under President Trump’s second term. Once hailed as strategic partners, the two nations now find themselves at odds over trade, oil diplomacy and geopolitical posturing. With punitive tariffs and shifting allegiances, India faces a diplomatic dilemma that raises pressing questions about fairness, ego, and the future of global alliances

America is a peculiar country. Its peculiarity is best explained by one of its own - Henry Kissinger (former US Secretary of State), who was once considered a master of international relations. He once said, “To be an enemy of America can be dangerous, but to be a friend is fatal.” Who else can understand this bitter truth better than India today? For twenty five years, India has been a friendly nation to America. This so-called friendship even deepened when Trump became President for the first time. Our Prime Minister, Narendra Modi, constantly called him a friend, and Trump too responded in the same tone. Over a lakh Indians welcomed Trump at Narendra Modi Stadium, in Motera, Ahmedabad, during his visit in February 2020. This grand spectacle of friendship was repeated at the ‘Howdy Modi’ event in Houston, organised by NRIs, where both Modi and Trump basked in the applause of a huge crowd.

India expected great rewards when Trump began his second term in January 2025. We thought it was the second inning of our friendship. But, what happened was just the reverse. Our relationship is now deteriorating every single day. Today, it is at its absolute worst since the 1998 sanctions imposed on us after our nuclear test.

The tariff blitz

Trump began his second term by unleashing global chaos with his benchmark and reciprocal tariffs, which were set at punishingly high levels for countries including India. World leaders came running to him, and the tariffs were delayed for a short while. But, now they are in full effect from 7th August. India’s tariff was set at a brutal 25%, higher than that imposed on many other nations. Pakistan, our neighbour and a known terror state, got a tariff of only 19%, similar to our other neighbours. Japan and the EU were given 15%. But, for its old friend India, America had another attack in store. On 6th August, they announced a further penalty tariff of 25%. The excuse? That India buys oil from Russia, and this money helps Russia continue its war against Ukraine. Astonishingly, China, the biggest buyer of Russian oil, was left completely untouched. So, in total, India now faces a crippling 50% tariff, the highest the US imposes, shared only with Brazil. Meanwhile, the tariff on China is just 30%. After years of friendship and being one of America's largest trading partners, India has been dealt a fatal, brutal blow.

So, why has the world's largest democracy been singled out for this punishment? The real reason is known only to Trump himself. But, the lies being peddled by his aides are:

• India is the 'Maharaja of tariffs'.
• America has a big trade deficit with India.
• India works as a contributor to the continuing war between Russia and Ukraine. This happens as India is a major buyer of oil from Russia, and the money so earned by Russia goes in aiding the war from Russian side.
• Peter Navarro (White House Trade Counsellor) even goes to say that India does profiteering from Russian oil as it sells the super refined oil got out Russian oil to America and EU. The money so received by India, from such sale, is diverted to Russia for the original purchase of Russian oil. Thus, a cycle is created, where money of America and EU is routed to Russia and Russia purchases weapons to be used against Ukraine.

The Russian oil scenario

These so-called reasons are utterly false. Like every sovereign nation, India has a sector-wise tariff structure. We have high tariffs on agriculture and dairy products for a very simple reason: to protect our millions of farmers from cheap foreign dumping. We have the world's largest population and a huge farming community. Cheap imports would destroy their livelihoods. We will protect them. Our other sectors have competitive tariffs, and we were openly negotiating trade agreements. We had already reduced many tariffs. America wanted to invade and dominate our agricultural markets; we refused. They are the ones who walked away from the table.

We have been buying Russian oil since 2022, and no one, including the previous US government, told us to stop. In fact, they encouraged it to control global oil prices. India is a massive oil importer; we must act in our own self-interest. We bought from Russia because they offered a discount, and we still get a 5% discount till date. Our External Affairs Minister has stated clearly: "We never forced any country to buy our refined products. The US had the option of not purchasing Russian refined oil from us but they never exercised this option. The EU is a huge buyer of Russian goods. Even America imports from Russia. China is the biggest buyer of all, yet the US gives pathetic excuses, saying China has 'leverage'. So, a gentlemanly India is punished, while China is spared. In 2024, China bought $62 billion worth of Russian oil compared to our $52 billion. The EU bought $39 billion worth of Russian goods. China pushes America around and controls materials critical to US defence, so it gets a free pass."

Punishing India by imposing penalty, over and above the very high reciprocal tariff, has been openly stated now, said that it is in fact a sanction. The senior aides of Trump, like Marco Rubio and Peter Navarro, have said that the peace to Russia - Ukraine conflict goes through India. India has to be penalised to bring Russia to the high table of peace-making. Trump met Putin in Alaska and despite some good noise, the peace seems far away.

We have been buying Russian oil since 2022, and no one, including the previous US government, told us to stop. In fact, they encouraged it to control global oil prices

A bruised ego and broken jets

There are other, more sinister reasons for turning on a friend. It appears the ego of President Trump has been badly hurt by India. Our recent ‘Operation Sindoor’ was a spectacular success. In just four days, we battered Pakistan with undeniable visual evidence. Trump had repeatedly boasted that he alone was responsible for the ceasefire between the two nuclear-armed nations. Pakistan, ever the sycophant, accepted his story and even proposed his name for a Nobel Peace Prize. India decried this. We stated repeatedly, and Prime Minister Modi said it in Parliament, that the ceasefire was an agreement between our two armies alone— Trump and no other country had any role in it. This seems to have wounded Trump's colossal ego. His punishment for India and his appreciation for Pakistan—including inviting their Army Chief General Asim Munir to the White House for lunch—is a clear outcome of this. Pakistan boosted his ego; India hurt it. So, punishment for us.

Connected to ‘Operation Sindoor’ is another cause. We bombed Pakistan's Noor Khan airbase into oblivion. It is believed many planes in its hangars were destroyed. This base housed American F-16s, and presumably, they were also damaged. The US's behaviour turned sharply against India after this operation. The F-16s are likely a key reason.

Ultimately, the US simply cannot stomach a rising India. We are the fourth largest economy and rapidly on our way to becoming the third. This US animosity was revealed when Trump snarled that India and Russia are both "dead economies" that would "sink together". Now, America is picking up Pakistan—a country Trump himself once called out as duplicitous—and is nurturing it to be a competitor against India. They know Pakistan is a devil, but they are promoting it anyway. America has signed a new agreement for oil exploration in Pakistan and gifted it a favourable 19% tariff. So, today, the US is not only punishing India economically, but is also deliberately hurting us emotionally by propping up our adversary.

India's path forward

The US whines about its trade deficit with India to justify its actions. This is a calculated deception. They conveniently ignore the enormous income their companies generate inside India, which isn't counted in the trade deficit. India is the biggest market for American tech firms and a vital source of data. Giants like Google, Meta, Amazon and Microsoft, rely on India to test products, train AI models, and drive their global growth. If India allowed Chinese giants like Tencent or Alibaba to compete freely, it could shatter the US monopoly. Trump talks about a $44 billion trade surplus in India's favour but deliberately omits the $80 billion plus the US makes from India, which includes a massive $25 billion from Indian students alone.

The US has posed problem to us with 50% tariff, but we have to transform it in the opportunity. The positive thing is that there is no panic situation. We have already started looking for new markets and new trade agreements. The recent trade-agreement with Britain may serve as a blueprint while dealing with other countries. There may be some change in our relationship with China and our Prime Minister’s visit to China may serve as a benefitting factor. BRICS group may strongly come together. If one friend goes, many other come.