By Dr Majid Khan
Melbourne (London Post) – Six months ago, the political theatre of US–India relations painted a picture of warmth, optimism, and deepening strategic alignment. President Donald Trump welcomed Prime Minister Narendra Modi to the Oval Office, hailing him as “a great friend” and celebrating the “shared values” of the world’s two largest democracies. That carefully choreographed display convinced many observers that Washington and New Delhi were entering a phase of unprecedented cooperation on trade, defence, and regional security.
Today, that optimism has evaporated. The relationship is now defined by escalating trade hostilities, accusations over foreign policy choices, and reciprocal diplomatic pushback. The turning point came this week when Washington announced a total 50 percent tariff on Indian goods, placing India in the highest tariff bracket alongside Brazil. The latest hike, an additional 25 percent on top of an existing 25 percent duty, was explicitly linked to India’s continued purchases of Russian crude oil.
The move stunned analysts. India had been one of the first countries to initiate formal trade talks with the Trump administration, and the personal rapport between the two leaders had been showcased repeatedly in public statements. Yet the White House’s message was clear: the administration prioritises onshoring over “friend-shoring,” even when dealing with strategic partners.
From Trade Talks to Tariff Wars
The current impasse stands in sharp contrast to the atmosphere earlier this year. In February, Washington and New Delhi had announced plans for a 10-year defence cooperation roadmap, while trade negotiators hinted at a possible bilateral deal by autumn. Talks reportedly made progress on lowering tariffs in several sectors, but India refused to open its politically sensitive agricultural markets, particularly food grain and dairy, to US competition. That deadlock, while significant, did not at the time appear to threaten the broader relationship.
The deeper friction arose from geopolitics. India’s steadfast continuation of oil and arms purchases from Russia, despite Western sanctions, became an irritant that Washington could no longer ignore. Since the start of the Ukraine war, India has emerged as one of the largest importers of discounted Russian crude, and Moscow remains New Delhi’s top defence supplier. For US officials, this economic engagement is not merely a matter of trade; it directly undermines the sanctions regime aimed at constricting Moscow’s ability to finance the conflict.
Secretary of State Marco Rubio articulated the US position bluntly: India’s purchases “in essence are helping to fund Russia’s war effort.” That framing has shifted Washington’s stance from private persuasion to public pressure, culminating in the punitive tariff decision.
Perceived Tilt Toward Pakistan
Fueling Indian suspicion is the perception of a US pivot toward Pakistan. In June, Trump hosted Pakistan’s army chief, General Asim Munir, for a two-hour White House lunch. Within days, he announced a joint venture to develop Pakistan’s “massive oil reserves.” The contrast was striking: while India faced escalating tariffs, Pakistan’s goods were subjected to a lighter 19 percent duty. Trump even speculated publicly that Pakistan might one day “be selling oil to India.”
This sequence, combined with Pakistan’s nomination of Trump for the Nobel Peace Prize for his claimed mediation in a recent India–Pakistan standoff, has strengthened the belief in New Delhi that Washington is willing to use Islamabad as a counterweight in its South Asia strategy.
The Kashmir Dispute and Public Rebuttals
The mistrust deepened in May during a violent flare-up in Indian-controlled Kashmir that killed 26 civilians. India blamed Pakistan for the attack. Trump claimed credit for mediating a ceasefire; a statement New Delhi swiftly and publicly denied. In a rare diplomatic move, the Indian government’s official readout of a June 17 Trump–Modi call stated unequivocally that “at no point, was there any discussion on a US–India Trade Deal, or any proposal for a mediation by the US between India and Pakistan.” This public correction underscored New Delhi’s growing irritation with perceived US overreach in regional matters.
India’s Counter-Moves
The tariff escalation has prompted New Delhi to respond with its own strategic measures. Several pending defence procurement deals with the US have been cancelled, with officials citing “changed strategic priorities.” A high-level visit by India’s Defence Minister to Washington was also blocked, signalling a deliberate diplomatic snub. Defence collaboration talks, once a centrepiece of bilateral engagement, are now on hold.
Indian policymakers have defended their Russia policy as part of the country’s long-standing doctrine of strategic autonomy. Since the Cold War, Moscow has been a key supplier of defence equipment, with much of India’s military hardware originating from Soviet-era systems. On the energy front, discounted Russian crude offers an attractive hedge against volatile global prices, making it, in New Delhi’s view; an economic necessity rather than a political alignment.
Washington’s Zero-Tolerance Lens
For the Trump administration, however, such nuance holds little sway. US policy increasingly frames the Ukraine war as a zero-sum contest in which any economic benefit to Moscow, however indirect, is unacceptable. Early in the conflict, Washington tolerated India’s oil purchases; now, Trump’s reported interest in securing a ceasefire with Russia appears to have hardened his stance toward partners who, in his view, are prolonging Moscow’s resilience.
Strategic Stakes
The downturn comes despite the significant mutual benefits at stake. India is the US’s ninth-largest trading partner, with bilateral trade in goods and services surpassing $190 billion in 2023. Strategically, India plays a pivotal role in US plans to counterbalance China’s influence in the Indo-Pacific. Conversely, India benefits from US investment, advanced technology, and defence cooperation.
Nevertheless, the relationship’s current trajectory is markedly transactional. Selective cooperation will continue where interests align, in areas such as counterterrorism or Indo-Pacific maritime security; but the deep trust and personal camaraderie once emphasised by both leaders have eroded.
Domestic Political Impact
In India, the fallout has reverberated in parliament. Opposition parties have seized the opportunity to question Modi’s foreign policy approach. Rahul Gandhi capitalised on Trump’s “dead economy” remark, telling reporters: “Everybody knows that the Indian economy is a dead economy. President Trump has stated a fact.” Such statements, while politically charged, underline how foreign policy disputes can feed domestic political narratives.
The Road Ahead
The future of US–India relations will hinge largely on whether New Delhi adjusts its Russian energy and defence posture. Should India persist with large-scale purchases, Washington may escalate further; possibly through additional tariffs, restrictions on defence technology transfers, or the slowing of joint strategic initiatives.
Still, there are incentives on both sides to avoid a complete rupture. The US needs India as a counterweight to China; India values access to US markets and defence technologies. A scheduled visit by a US trade delegation to New Delhi later this month offers a potential, if modest, opportunity to stabilise dialogue.
Yet, as Indrani Bagchi of New Delhi’s Ananta Centre notes, “This is no longer just about trade or oil; it’s personal between the two leaders.” If both Trump and Modi maintain their current positions, the days of public displays of friendship may be over, replaced by an interest-driven relationship in which each side calculates every move through the lens of leverage rather than shared values.
INPS Japan