Trump doubles tariffs on India, jeopardizing longstanding ties

MUMBAI, India — India’s prime minister responded with defiance after President Trump threatened to double tariffs on his nation to 50%, as a result of it purchases Russian oil.

Trump accuses India of undermining American efforts to counter Russia’s invasion of Ukraine.

“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits,” he posted on Reality Social earlier this week.

If Trump goes by along with his risk, the brand new charge would go into impact on Aug. 27 and make India one of the vital closely tariffed buying and selling companions of the U.S., alongside Brazil.

On Wednesday, Indian Prime Minister Narendra Modi advised loyalists that he wouldn’t be cowed.

“I know that I will personally have to pay a heavy price for it,” he stated. “But I am ready for it.”

India ramped up its purchases of Russian oil after Moscow provided it at a reduction after invading Ukraine three years in the past. In 2024, India purchased Russian oil price greater than US $47 billion, in accordance with the Finnish assume tank Centre for Analysis on Vitality and Clear Air. Almost a 3rd of India’s whole oil imports come from Russia.

Indian analysts had been fast to notice that different main importers of Russian oil, China and Turkey, had not confronted any further punitive tariffs. Indian officers have accused the U.S. of double requirements for persevering with to commerce with Russia, whereas it punishes different international locations for doing so.

On Wednesday, a spokesman for the ministry of exterior affairs, equal to the division of state, described Trump’s newest order as “unfair and unreasonable.” The U.S. bought greater than $3 billion of products and providers from Russia final yr, though it has been declining in recent times.

Deep financial ties

Bilateral commerce between India and the U.S. is greater than $150 billion.

A few of India’s exports to the U.S. stay, to date, exempt from tariffs, together with prescription drugs and electronics. However different industries could also be badly hit by the tariffs, together with exports of gem stones, seafood and textiles.

The 50% tariff would have an effect on tens of hundreds of employees and doubtlessly shave billions off India’s earnings, says Anupam Manur, professor of economics at The Takshashila Establishment, a Bengaluru-based assume tank and public coverage college.

“This comes at a time India desperately needs to create more jobs,” he says.

India insists its Russian oil imports present financial safety, and has lengthy bristled over Western strain to distance itself from Russia, with whom India enjoys a decades-old relationship. However India’s assertiveness in public, Manur says, hasn’t stopped the nation from heeding to U.S. calls for prior to now.

He factors to Trump’s first presidency in 2019, when the U.S. requested international locations to cease oil imports from Iran after imposing sanctions on Tehran over its nuclear program.

“At the time too, we made statements saying that India’s energy security comes first. Gradually, we stopped buying oil from Iran,” Manur says.

In response to information from Helsinki-based assume tank Centre for Analysis on Vitality and Clear Air, some Indian state-owned refineries stopped procuring from Russia in early July, simply across the time Trump warned India of “secondary tariffs” until it stopped sourcing oil from Russia.

Manur says the U.S. may be utilizing India’s vulnerability as a bargaining chip in its ongoing commerce negotiations.

A shift in relations

Because the Nineties, America’s bipartisan overseas coverage has been to attract nearer to India, as an financial and political bulwark in opposition to China.

Throughout Trump’s first administration, he embraced Modi as a key ally. The 2 leaders held rallies for one another of their respective international locations and cultivated a private relationship.

However the relationship between the 2 leaders and nations is unravelling.

Since February, India and the U.S. have had 5 rounds of commerce talks. But, a serious distinction stays unresolved: U.S. officers need its agriculture and dairy merchandise to be offered in India. That may be a politically explosive demand for India, the place tens of millions of employees are engaged in agriculture.

Indian analysts additionally say that Trump is aggravated by Modi’s refusal to acknowledge Trump’s position after the president claimed he organized a ceasefire between India and Pakistan after the 2 international locations fought in Could for six days.

India insists its navy prowess pressured Pakistan into that ceasefire. Pakistan, then again, has profusely thanked Trump, and even provided to appoint him for a Nobel Peace Prize.

What Trump could actually need from India is a thanks, says Milan Vaishnav, director of the South Asia Program on the Carnegie Endowment for Worldwide Peace.

“Until and unless there’s a public endorsement of Trump’s role, it’s going to be very hard to get past this stage,” he says.