US-India Trade Relations Deteriorate Amid Tariff Dispute

The trade relations between the United States and India have taken a hit as US President Donald Trump announced plans to “substantially” raise tariffs on Indian goods. This move is a response to India’s purchase and resale of “massive amounts” of Russian oil, which Trump believes is helping to finance Russia’s war efforts in Ukraine. Trump stated, “They don’t care how many people in Ukraine are being killed by the Russian War Machine… Because of this, I will be substantially raising the Tariff paid by India to the USA.”

The tariffs were initially set at 25% on Indian goods, affecting approximately $87 billion worth of imports. However, the additional penalties that Trump threatened to impose remain unclear. According to reports, the new tariffs will take effect on August 7, giving the customs department time to prepare their systems.

India has rejected Western criticism of its business dealings with Russia, calling it “unjustified and unreasonable.” India’s Ministry of External Affairs spokesperson Randhir Jaiswal emphasized that New Delhi’s imports are aimed at ensuring “predictable and affordable energy costs to the Indian consumer.” Jaiswal further stated, “Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.”

The US Energy Information Administration (EIA) reported that India has been buying Russian oil at a discount since the start of the war in Ukraine in 2022. India’s purchases of Russian oil increased more than sixfold after the conflict broke out. This development has sparked criticism from the US, with top White House aide Stephen Miller accusing India of “financing” Russia’s war in Ukraine.

Despite Trump’s criticisms, India seems determined to maintain its relations with Russia. Jaiswal noted that India’s bilateral relationships with various countries stand on their own merit and should not be seen from the prism of a third country. He emphasized that India and Russia have a “steady and time-tested partnership.”

The escalating trade tensions between the US and India could have significant implications for both countries. The tariffs imposed by the US may affect India’s economy, particularly in labor-intensive sectors like apparel and jewelry. However, India is likely to continue prioritizing its national interests and economic security.

In a related development, US envoy Steve Witkoff will visit Russia in the coming days to discuss the war in Ukraine. Trump has expressed his desire to broker a deal to end the conflict, stating that he wants a “deal where people stop getting killed.” This diplomatic effort comes as Trump increasingly criticizes Russia and threatens further sanctions against Moscow.