Former President Donald Trump has sparked fresh international tensions after threatening to impose a sweeping 50% tariff on Indian goods if elected in November, citing failed trade negotiations and Prime Minister Narendra Modi’s continued importation of Russian oil.
The remarks, delivered during a campaign rally in Dayton, Ohio on Tuesday, marked Trump’s most aggressive posture yet toward New Delhi, a country he once called “America’s greatest friend” during a 2020 state visit. Now, that friendship appears to be fraying fast.
“They don’t listen, so we’ll make them listen”
Trump’s comments came as part of a broader speech attacking what he called “unfair trade cheats” and “countries that take and take and give us nothing.”
“India keeps buying oil from Russia like it’s no big deal. Billions of dollars — straight to Putin,” Trump said, prompting boos from the crowd. “And they send us all their cheap products, and we’re just supposed to smile? No. When I’m back in office, we’re slapping a 50% tariff on every single thing they send here — until they respect American interests.”
The Biden administration, while also pressuring India over its oil imports, has avoided hardline trade threats, instead favoring quiet diplomacy. Trump’s blunt approach signals a return to the transactional, combative foreign policy that defined his first term.
Breakdown Behind Closed Doors
According to senior U.S. trade officials who spoke anonymously to The Anthor, high-level talks with India stalled in July after New Delhi refused to curb its purchases of discounted Russian crude — a key component of Modi’s energy security strategy.
India, the world’s third-largest oil importer, has sharply increased its reliance on Russian oil since Moscow’s 2022 invasion of Ukraine, taking advantage of steep price cuts amid Western sanctions.
"Washington pushed hard for a phased reduction," said one official. "But Delhi made it clear that, until there's an alternative, Russia remains too critical to give up."
Sources add that India also balked at U.S. proposals to open certain domestic markets — particularly in pharmaceuticals and e-commerce — to American firms.
Modi’s Office Responds
In a brief statement released Wednesday morning, India’s Ministry of External Affairs did not mention Trump by name but reaffirmed the country's commitment to "strategic autonomy" and "energy diversification in line with national interests."
"India values its comprehensive global partnerships," the statement read. "Our trade and energy decisions will continue to reflect pragmatic national priorities and long-term stability."
Privately, officials in Delhi are said to be “deeply concerned” about Trump’s potential return and the instability it could bring to U.S.-India relations.
Economic Fallout?
Experts warn that if enacted, a 50% tariff could severely damage bilateral trade, which reached a record $191 billion in 2024. Key Indian exports such as pharmaceuticals, textiles, steel, and IT services could be hit hard — as could U.S. companies operating in India.
“A tariff of that scale would not just be punitive — it would be catastrophic,” said Arvind Vyas, senior fellow at the Indian Council for Trade Policy. “Both economies would suffer, but the political symbolism matters even more. It would be seen as an open attack on India's sovereignty.”
Markets reacted nervously Wednesday, with shares of Tata Motors and Infosys falling sharply on the Bombay Stock Exchange. Meanwhile, energy analysts warn the situation could push India even closer to China and Russia, complicating Washington’s Indo-Pacific strategy.
A 2025 Flashpoint?
While some view the threat as campaign rhetoric, others say Trump is serious — and may use it as leverage with voters tired of globalization and rising fuel prices.
“This isn’t just about India,” said Rachel Stein, a former U.S. Trade Representative adviser. “Trump’s playing to a domestic audience, but in doing so, he’s signaling a broader retreat from multilateralism — again.”
As both Trump and Modi face critical political moments — the former in November’s U.S. election, the latter with domestic opposition rising ahead of key state elections — the coming months could prove decisive for the future of one of the 21st century’s most important geopolitical relationships.
For now, one thing is certain: U.S.-India relations have entered uncertain — and potentially dangerous — territory.