India has finally come into the crosshairs of the Trump storm, having lived a reasonably charmed life in the initial weeks of his presidency. The magnitude of Donald Trump’s additional 25 per cent tariff, taking the total to 50 per cent, goes beyond the narrow confines of bilateral trade and economics. It has political ramifications, meant to hurt India.
When we look back, India was quick off the mark to engage with Trump 2.0, with visits by the External Affairs Minister for the inauguration ceremony and then by Prime Minister Narendra Modi himself within a month of Trump taking office. Behind the scenes, India was also quick to present a forward-looking trade package to American negotiators, having drawn lessons from his last term when Trump withdrew the Generalised System of Preferences (GSP) for India. Geopolitically, India welcomed the US President’s intention to end the Ukraine conflict. It viewed the announcement of tariffs on China as a much-needed correction to Western indulgence of China. The personal chemistry between PM Modi and President Trump was taken as an accepted fact. Things seemed to be going well.
Admittedly, there was foreboding of tough times on trade and tariff matters. The pejorative references to India were becoming uncomfortably frequent and strident, and the memories of difficult negotiations under Trump 1.0 never went away. Yet, India escaped Trump’s notice as he set about turning against US allies, striking at the foundations of the trans-Atlantic alliance, challenging Canada’s sovereignty, not to forget renaming the Panama Canal and the proposal to buy Greenland.
The vocabulary and mood of the India-US relationship has changed. The romanticism of shared values is no longer visible. It has now boiled down to teaching a lesson and meting out punishment at the leadership level. We are told that the President is a man in a hurry, and is counting his time, not in weeks but days. The relationship has been dealt a severe blow, the likes of which has not been seen in recent memory. India has been stigmatised for allegedly funding Russia’s war effort, in addition to being called the “tariff king”.
Passing the blame for lack of progress in Eastern Europe on India or believing that punishing Delhi will bring Moscow to the negotiating table is obfuscation. Russia’s war machine is funded not by India. It is built on the billions of dollars of earnings from energy exports to Europe over decades, besides ongoing imports. The war machine will continue even if India were to bring its imports to zero. It is a well-advertised fact that top US and Russian negotiators were, till a few months ago, discussing potential US investments, trade and economic cooperation with Russia.
A better attempt to enfeeble Russia would be to squeeze Beijing. Painting India and China with the same brush is a geopolitical self-goal. Moscow and Beijing are happy to see the US doubling down on India. India is not going to fall, but questions which were considered settled on the durability of friendship with the US have resurfaced.
Some in the West and the US project India’s purchase of oil from Russia as an exhibition of its pursuit of “strategic autonomy”. Nothing could be more inaccurate. India has justified its energy trade with Russia ad nauseum. There is a bigger concern at play. If this is an era where transactionalism and unilateralism form the basis of foreign policy and there are no taboos, why should India not brace for a scenario of the US striking a deal with China, or even a breakthrough in US-Russia relations? It is the existence of such uncertainties that strengthens, rather than weakens, the Indian impulse towards geopolitical hedging. The surreal hosting of the Pakistani army chief in the White House and other encomiums heaped on Pakistan, turning a deliberate blind eye to its sponsorship of terrorism in India with Chinese backing, make such hedging more imperative.
There is more to the tariff war launched against India than frustration with Russia. Other sources of anger seem to stem from India’s non-committal posture on buying certain high-value defence platforms, and the denial of any mediatory role played by the US during Operation Sindoor. There is frustration on Indian bargaining hard on agriculture and dairy imports on the trade track. Added to this are accusations relating to Indian immigration practices, cut back in visas, and people-to-people movement, considered a foundational element of the relationship. Several pressure points are being applied. The India-US relationship is being tested to its limits. It will get worse before it gets better.
For Indians, this is a useful reality check. National security and economic growth cannot be outsourced. India is far from being a rejectionist state, but its interests are real, not imagined. The tariffs imposed could lead to the outpricing of Indian goods, services and human resources from the US market; to a possible unravelling and dismantling of the connectivities built over the last few decades. How should India respond to the US President’s onslaught?
To begin with, keep calm, avoid raising decibel levels, and control the damage. There is a need to focus on internal reform and rebalancing. The India-US relationship is too important to be derailed. The two countries have had a history of talking straight to each other, which has seen them through seemingly unbridgeable positions in the past. Red lines cannot be shifted, but grand bargains are always possible. The past seven months of the Trump era have been marked by volatility and sharp turns. The next few months are likely to be much the same, because much of what Trump is doing is still work in progress.
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