In a clear display of calibrated diplomacy and strategic foresight, the Modi government has chosen restraint over retaliation in response to U.S. President Donald Trump’s unexpected announcement of a 25 percent tariff on Indian imports. While expressing disappointment over the move, senior officials in New Delhi affirmed that India will not be provoked into hasty countermeasures and will instead pursue constructive economic engagement with the United States.
Despite mounting pressure from Washington and US President Donald Trump’s explicit demands, the Modi government is unlikely to make any new defence acquisitions from the United States beyond previously agreed contracts, many of which are already facing years-long delivery delays. This development, reported by Bloomberg, comes even as Trump has threatened additional penalties on India over its continued purchases of Russian oil and weapons.
According to sources cited in the report, India has clearly communicated to the US that it is not interested in acquiring the F-35 stealth fighter jets, which were offered by President Trump during Prime Minister Narendra Modi’s state visit to the White House earlier this year. Instead,
Indian officials conveyed that the country remains committed to its long-term goal of building defence self-reliance and is more inclined towards co-developing and manufacturing military equipment domestically under the “Make in India” initiative.
India’s rejection of the F-35s signals a strategic shift and one that could potentially further sour relations with Washington.
Not considering F-35 deal
Officials emphasised that India is not planning any additional defence purchases from the US at this time, a key expectation from President Trump. Specifically, India has informed Washington that it is not interested in acquiring the F-35 stealth fighter jets offered by Trump during Prime Minister Modi’s visit to the White House in February. Instead, the Modi government remains focused on indigenous defence production and joint development partnerships, officials said.
While India is also developing its own fifth-generation fighter program under the Advanced Medium Combat Aircraft (AMCA) project, the indigenous jets are not expected to be operational before 2035. To bridge this critical capability gap and counter the growing aerial threats posed by China and Pakistan, the Indian Air Force (IAF) is looking to acquire at least three squadrons of fifth-generation fighters from abroad.
Currently, only two fifth-generation combat aircraft are available on the international market, the US-made F-35 and Russia’s Su-57. India’s tilt toward the latter underscores its strategic autonomy and the continuation of its long-standing defence partnership with Russia, even at the cost of heightened friction with the United States.
Commerce Minister reacts in parliament
Commerce and Industry Minister Piyush Goyal addressed the issue in Parliament on Thursday, stating, “The implications of the recent developments are being examined.” Amid loud protests by opposition members, Goyal added that the government is consulting exporters and industry associations and will take “all necessary steps to secure and advance our national interest.”
India, he affirmed, remains committed to a “mutually beneficial” trade deal that protects the livelihoods of Indian farmers, entrepreneurs, and MSMEs (Micro, Small and Medium Enterprises).
Trump’s outbursts raise diplomatic temperature
Despite previously warm ties between Trump and Modi, Wednesday’s announcement marked a sharp shift in tone. Trump accused India of maintaining “strenuous and obnoxious” trade barriers and threatened further penalties over India’s continued purchases of Russian energy and defence equipment. “I don’t care what India does with Russia,” Trump later posted on his social media platform Truth Social, referring to both nations as “dead economies” in a comment that sparked outrage among Indian analysts and diplomats.
While addressing reporters later, Trump suggested that talks with India were still ongoing and that a final decision on the tariffs would be made by the end of the week.
The “dead economy” remark by Trump
U.S. President Donald Trump’s derogatory remarks calling India a “dead economy,” Union Commerce and Industry Minister Piyush Goyal addressed Parliament with facts, conviction, and a clear vision of India’s rise on the global stage.
Trump, in a controversial post on Truth Social, said:
“I don’t care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India. Their tariffs are too high, among the highest in the world. Likewise, Russia and the USA do almost no business together.”
While New Delhi officially chose not to dignify the post with a direct response, Goyal’s powerful address in the Lok Sabha served as a point-by-point counter, grounded in data and confidence, without descending into rhetoric.
India set to become the world’s third-largest economy
Referring to the latest IMF projections, Goyal stated that India, already among the top five global economies in nominal GDP terms, is poised to overtake Japan by the end of the current financial year and soon surpass Germany to become the third-largest economy, behind only the U.S. and China.
“We have risen from being the 11th largest economy to one of the top five, thanks to sustained reforms and the tireless efforts of our farmers, MSMEs, and entrepreneurs,” he said.
“It is widely expected that India will become the third largest economy in a few years, and this is no longer just an aspiration, it’s a trajectory,” he added.
Trade talks must be mutually respectful and beneficial
Responding subtly to Trump’s insinuations about stalled trade deals, Goyal underlined that India remains open to mutually beneficial agreements, but not on unequal terms.
“Our trade talks with the U.S. have been ongoing since March, through both physical and virtual meetings. We’ve signed successful FTAs with the UAE, UK, Australia, and EFTA. We remain committed to similar arrangements but only when they protect India’s interest,” Goyal noted.
He further informed Parliament that U.S. trade negotiators are expected to visit India in the second half of August for the sixth round of trade talks, despite the uncertainty triggered by Trump’s tariff threats and threats of penalties over India’s energy and arms ties with Russia.
PM Modi on Trump’s role in Operation Sindoor
In his nearly two-hour-long speech in the Lok Sabha on July 29, 2025, Prime Minister Narendra Modi addressed claims made by US President Donald Trump regarding his role in halting India’s military action, Operation Sindoor, following the Pahalgam terror attack.
Modi firmly stated that “no world leader asked India to stop the operation,” implicitly refuting Trump’s repeated assertions of brokering a ceasefire between India and Pakistan. He emphasised that India’s actions were non-escalatory and that the operation was paused after achieving its objectives on May 7, with no external pressure involved.
Modi also mentioned receiving calls from US Vice President J.D. Vance on May 9 but noted he was unable to take them due to meetings with the armed forces, avoiding any direct mention of Trump by name. This response underscored India’s stance on conducting its operations independently, dismissing any notion of US mediation.
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