TheNews21 Explainer: Trump’s 50% Tariff on India: Trade War Reshapes US–India–Russia–China Relations

X: @vivekbhavsar

Washington’s steep tariff on Indian exports sparks a geopolitical realignment, with Moscow and Beijing moving closer to New Delhi as high-stakes summits loom.

New Delhi: The United States has delivered a major diplomatic and economic blow by imposing a steep 50% tariff on Indian exports, targeting crucial sectors such as textiles, gems and jewellery. The White House calls it a move to restore “market fairness,” but the reality points to deeper geopolitical motives — to slow down India’s rapid economic growth, pressure New Delhi over discounted Russian oil imports, and reassert US dominance in the global trade order. This unprecedented escalation in the US–India trade war has now pushed Russia and China a step closer to India, creating a rare moment where all three powers see Washington as a common rival.

The oil and Pakistan factor is central to this shift. Pakistan’s untapped oil and gas reserves in Balochistan, the Indus Basin and the Arabian Sea are highly strategic. For Washington, re-engaging Islamabad is about pre-empting China’s full control over these resources, gaining logistical leverage in the Arabian Sea, and using Pakistan as a counterweight to both Iran and India. Strengthening US–Pakistan ties is also a subtle way to apply indirect diplomatic pressure on New Delhi.

The 50% tariff is equally about slowing India’s rise as a global economic power. India is projected to overtake Japan and Germany to become the world’s third-largest economy by 2030, challenging US dominance in technology, defence manufacturing, pharmaceuticals and emerging industries. These tariffs act as a deliberate roadblock and force India into trade negotiations on terms favourable to Washington. The move also punishes India for buying discounted Russian crude oil in defiance of Western sanctions, functioning as sanctions by stealth. By targeting Indian exports, Donald Trump is signalling to New Delhi to cut back its energy ties with Moscow, while warning Russia that even long-standing friends will face consequences if they undermine US sanctions.

At the same time, the US continues significant economic engagement with China despite ongoing trade tensions. Washington sees Beijing as a known strategic rival but views India as a more unpredictable competitor because of its multi-aligned foreign policy. By hitting India now, Trump aims to shape New Delhi’s strategic and economic decisions before its autonomy becomes harder to influence.

Russia and China have wasted no time in responding. Russian President Vladimir Putin is expected to visit India by the end of this year for the annual India–Russia bilateral summit, marking his first trip since December 2021. Discussions are anticipated to cover food security, increased fertilizer exports from Russia, expanding Indian presence in the Arctic, and a second Russian-built nuclear power plant, alongside the usual focus on defence and energy cooperation. Meanwhile, Prime Minister Narendra Modi will visit Tianjin, China, on August 31–September 1, 2025, for the Shanghai Cooperation Organisation (SCO) leaders’ summit. This offers an opening for India to explore limited de-escalation with Beijing on the Line of Actual Control, though China’s record of border encroachments in Arunachal Pradesh, Ladakh and Sikkim, interference in the Dalai Lama’s succession, and its financial and military backing to Pakistan prove it cannot be a trusted long-term partner.

India stands at a strategic crossroads. The United States remains its largest export destination, accounting for almost 20% of all Indian exports, but excessive concessions to Washington risk eroding India’s sovereignty in foreign policy, energy security and agricultural subsidies. Russia and China present short-term opportunities, but long-term dependency on either would be risky. The solution lies in strategic balance — diversifying exports to the EU, ASEAN, Africa and Latin America, using the Modi–Putin summit and SCO Tianjin 2025 to secure concrete concessions, and establishing a permanent tariff war room to safeguard vulnerable sectors and reroute supply chains rapidly.

Donald Trump’s 50% tariff is not merely an economic penalty — it is a calculated geopolitical tool to reshape India’s foreign policy. The coming months will determine whether New Delhi can turn this crisis into strategic leverage, protecting its role as an independent global power or sliding into the orbit of another superpower. In this high-stakes US–India trade conflict, the key will be to remain flexible but unyielding in defending India’s long-term strategic autonomy.

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