America and India: Trade Tensions and the Hidden Truths

In just a matter of months, U.S. President Donald Trump has shifted from praising India as a strategic partner to stating that he “does not care” if its economy collapses, attributing this change to India’s economic ties with Russia, particularly in the energy sector. It is relatively rare for both India and China to be criticized in U.S. statements, given that historically, India has been seen as an ally, especially as U.S. interest in countering China in the Pacific and Southeast Asia has grown, where India is a crucial element of U.S. strategy.

The Trump administration maintains that it values the U.S.-India partnership; however, relations between Washington and New Delhi have gradually deteriorated due to disagreements over trade and Russia, alongside the ongoing debate about credit for the ceasefire achieved after the four-day military conflict in May between India and its rival Pakistan.

This strain, exacerbated by Trump’s public remarks against India, threatens to undermine a significant and complex geopolitical relationship and jeopardizes the connections Trump has built with Indian Prime Minister Narendra Modi. These cracks in the relationship have emerged as U.S. ties with Pakistan have improved in recent months.

According to Manoj Joshi, a distinguished fellow at the Observer Research Foundation in India, “Modi must be utterly displeased.”

The United States views India as a bulwark against China but is irked by India’s continued close relations with Moscow. Washington asserts that India is purchasing Russian oil and weapons, which contributes to the strengthening of the Russian economy.

As Trump has turned against Russian President Vladimir Putin, he has pledged to impose tariffs on countries that continue to engage with Moscow. On Wednesday, Trump stated that India would face “penalties” for its continued purchases of Russian goods, further declaring in a social media post, “I do not care what India does with Russia; they can collapse economically together, that doesn’t concern me.”

While announcing a 25% tariff on Indian goods, Trump criticized New Delhi for importing large quantities of discounted Russian oil. In the last quarter of 2024, India accounted for one-third of Russian oil exports, according to the Indian ORF.

U.S. Secretary of State Marco Rubio commented in an interview with Fox News that India’s ongoing procurement of Russian oil “essentially helps finance the Russian war effort and prolongs the war in Ukraine,” noting that this was “not the only point of tension with India.”

Meanwhile, Indian Foreign Ministry spokesperson Randhir Jaiswal told reporters on Friday that U.S.-India relations “have navigated many shifts and challenges. We remain focused on the core agenda we have committed to together, and we are confident that the relationship will continue to progress.”

Nonetheless, Trump’s remarks represent a departure from the early days of his administration when expectations were high for building on the Trump-Modi relationship, which flourished during his first term. Mike Waltz, prior to his appointment as National Security Advisor, had described this bond as “the most important relationship of the 21st century.”

Trump hosted Modi at the White House in February, praising him as a “skilled negotiator,” while Modi responded with a slogan reminiscent of Trump’s campaign, expressing his desire to “make India great again.” This was followed by high-profile visits to New Delhi, including that of National Intelligence Director Tulsi Gabbard and Vice President JD Vance.

However, the warmth between the two soon faded after the quick pursuit of a bilateral trade agreement faltered. Trump has reportedly expressed deep frustration over the lack of progress with New Delhi, especially on the contentious issue of tariff negotiations surrounding the opening of India’s agricultural markets, which employ over 40% of the workforce.

Opening this politically protected sector could provoke backlash from Indian farmers, a significant electoral bloc. This represents a political risk for Modi, who in 2021 had to backtrack on attempts to liberalize the agricultural sector after widespread farmer protests.

U.S.-India relations faced another setback in May during a four-day skirmish between India and Pakistan. The conflict began after an armed attack in Indian-administered Kashmir, which Modi’s government attributed to Pakistan, while Islamabad denied involvement.

Trump tweeted that his team brokered a ceasefire on May 10. Pakistan welcomed this announcement and even nominated Trump for the Nobel Peace Prize. Conversely, India was displeased with Trump’s remarks, insisting that no outside force could dictate its ceasefire. This stance reportedly angered Trump personally, as he informed aides that he was upset with Modi for not thanking him.

Trump further heightened tensions when he offered to mediate the ongoing Kashmir dispute between India and Pakistan. Lisa Curtis, a former National Security Council official, commented to the Wall Street Journal that “this was embarrassing for India, which has consistently rejected any external mediation while Pakistan has always sought it.” She added, “Had Trump limited himself to one or two tweets on May 10, the crisis could have been resolved, but he continued to speak about America’s role in the ceasefire.”

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