India-US Tariff Clash: Trump Under Fire in America, India Rejects Demands to End Russia Trade

New Delhi: The India-US trade dispute has escalated sharply this week as US President Donald Trump announced an additional 25 percent tariff on Indian imports, pushing the total levies to a steep 50 percent. This move marks a significant intensification of Trump’s aggressive economic policy designed to protect American jobs and fulfill his “Make America Great Again” promise during his second term.

Trump’s decision to further raise tariffs on Indian goods is largely rooted in his criticism of India’s continued trade with Russia, especially in the area of crude oil imports. The US administration alleges that India’s ongoing purchase of Russian oil indirectly supports Moscow’s military operations in Ukraine, a claim New Delhi firmly rejects. Indian officials argue that their trade decisions are driven by the country’s economic and energy security interests and not influenced by external political pressure.

Modi to Lead High-Level Cabinet Meeting on Tariff Impact

In light of the recent tariff hike, Prime Minister Narendra Modi is set to chair a crucial Cabinet meeting on Friday at 1 pm to review the broad implications for Indian exports. The government will assess the economic fallout from the increased tariffs and explore potential policy responses to mitigate the impact on Indian businesses and exporters.

Officials are expected to discuss measures to enhance domestic competitiveness, diversify export markets, and possibly revisit India’s trade policies to counteract the protectionist US stance.

India Puts $3.6 Billion Boeing Deal on Hold Amid Rising Costs

The growing trade tensions have also impacted defence procurement. According to recent reports, India has paused a $3.6 billion deal with the United States for Boeing P-8I maritime patrol aircraft. Originally approved by the US State Department in 2021, the deal covered the purchase of six additional Boeing jets.

However, the cost of the project has surged due to supply chain disruptions and the newly imposed US tariffs, causing an almost 50 percent increase in expenditure. Defence sources revealed that the Ministry of Defence has decided to undertake a “strategic reassessment” of the deal. The reassessment will take into account the escalating costs, shifting geopolitical dynamics, and the importance of maintaining strategic autonomy in defence acquisitions.

This pause highlights the tangible impact of tariff disputes on bilateral defence cooperation and signals India’s cautious approach amid increasing economic uncertainties.

Trump Rules Out Trade Talks Until Tariff Dispute Resolved

In a clear indication of the current stalemate, President Trump has ruled out any possibility of restarting trade negotiations with India until the tariff issues are resolved. Speaking to the media, Trump stated, “No, not until we get it resolved,” when asked if talks would resume soon.

This hardline position further complicates the prospects for easing tensions between the world’s two largest democracies and raises concerns about prolonged trade disruptions.

Strategic Alignments: Russia’s Putin to Visit India Amid Growing US Pressure

Amid the ongoing trade tensions, Russian President Vladimir Putin is scheduled to visit India later this month, according to National Security Advisor Ajit Doval. The visit gains added significance given the mounting US pressure on India over its trade ties with Russia.

India’s engagement with Russia, especially in defence and energy sectors, continues despite US warnings and sanctions. Putin’s visit is expected to reinforce India-Russia strategic relations and counterbalance pressures from the US-led bloc.

Modi’s Upcoming Trip to China for SCO Summit

Adding further layers to India’s foreign policy balancing act, Prime Minister Narendra Modi is slated to attend the Shanghai Cooperation Organisation (SCO) Summit in Tianjin, China, from August 31 to September 1. During the summit, Modi is likely to meet Chinese President Xi Jinping, an encounter watched closely by international observers amid ongoing border disputes and geopolitical rivalry between the two Asian giants.