US tariffs on India mark diplomatic low point, strain global trade alliances

Department of Research, Studies and International News -11-08-2025

Relations between India and the United States have taken a sharp downturn following Washington’s decision to impose a staggering 50% tariff on Indian imports, the highest level faced by any country globally. This unprecedented move, ostensibly justified by India’s continued energy cooperation with Russia, is widely seen as politically motivated and reflects a broader shift in Washington’s economic and geopolitical posture under President Donald Trump.

The decision to penalize India for purchasing Russian oil, through an additional 25% tariff that comes on top of existing ones, starkly illustrates the erosion of trust between the two nations. Despite years of publicly cordial relations between Prime Minister Narendra Modi and Trump, the U.S. has chosen to prioritize economic isolationism and punitive pressure over mutual dialogue and cooperation. With this development, India joins a very limited group of countries, including Brazil, subjected to such aggressive American trade policies.

Experts and observers note that the tariffs reflect Washington’s broader agenda of “onshoring”, bringing manufacturing back to the U.S., rather than fostering productive trade relationships with long-standing partners. “The collapse of trade talks with India was unexpected,” remarked Vina Nadjibulla of the Asia Pacific Foundation of Canada. “This moment marks one of the lowest points in India-U.S. relations in recent memory.”

For India, which has maintained a principled foreign policy of non-alignment and diversification, the American tariffs are a blatant overreach. New Delhi has firmly defended its energy deals with Russia as necessary for the country’s energy security, a non-negotiable concern for a nation of 1.4 billion people. The Indian government responded to the new tariffs by calling them “unfair, unjustified, and unreasonable.”

Tensions have been building in recent weeks, with Trump publicly criticizing India’s independent foreign policy choices. He referred to India as a “dead economy” and threatened reprisals over continued defense and energy purchases from Moscow, a long-standing strategic partner for New Delhi. Despite offering to ease restrictions on American industrial goods and considering reduced tariffs on vehicles, India refused to compromise on agricultural and dairy imports, sectors vital to the livelihoods of hundreds of millions of Indians.

Washington’s demands have been tone-deaf to the economic and political realities of India’s domestic priorities. Much like Canada and other sovereign nations, India has stood its ground on issues concerning food security and rural employment, even at the cost of straining ties with the U.S.

Adding a geopolitical layer to the tensions is Trump’s controversial claim of mediating a ceasefire between India and Pakistan following their military standoff in May. New Delhi has categorically denied any American involvement, stating that the resolution of hostilities was handled bilaterally without foreign interference. As a result, India’s leadership finds itself navigating complex geopolitical terrain. Balancing relations with the West, while reinforcing its strategic alliances with Russia and emerging powers such as China, has become more urgent than ever. India is already advancing talks with the European Union and recently finalized a trade agreement with the United Kingdom. Prime Minister Modi is also expected to attend the Shanghai Cooperation Organisation summit in China, signaling renewed engagement with regional allies.

The American decision to target India with exorbitant tariffs comes at a time when New Delhi is positioning itself as a global manufacturing hub. With companies like Apple planning to shift assembly to India, the label of a 50% tariff nation jeopardizes investor confidence. Although electronics are exempt from the new tariffs for now, the broader message from Washington is clear: trade will be weaponized to serve American political interests.

In contrast, China, Russia, and India continue to advance a multipolar world order based on mutual respect, economic sovereignty, and non-interference. As the U.S. alienates even its traditional partners, nations across Asia and the Global South are increasingly turning toward more balanced, cooperative alliances that reject American economic coercion.