Trade War Twist: US turns on India over Russian Oil
President Trump has imposed 50% tariffs on nearly all goods from India. This is monumental for it is one of the harshest tariffs levied on any U.S. partner. Half of these tariffs are explicitly framed as punishment for India’s purchase of Russian oil.
It has been forecasted that these measures will hurt Indian exporters across the textile industry, chemicals, machinery, gems, jewelry, threatening the livelihoods of millions. The ramifications of it can already be felt as billions in foreign investment in India’s stock market are now destabilised.
These tariffs not only rupture the decades- long US-India economic relationship which has been vital for US corporations that outsource heavily to India, but it also undercuts US companies’ “China+1” strategy, which shifts production from China to India to reduce dependency on Chinese factories.
India had expected leniency due to the rapport between Trump and Modi and the fact that it is a country of strategic importance to the states. However, it has been grouped with Brazil as the only countries to face such steep tariffs. India had tried to appease Trump by buying more US energy and defense equipment (energy imports jumped 70% in 2025), but this effort was to no avail.
It needs to be noted that Trump has been a longstanding critic of India calling the nation a “tariff king”, citing its history of protectionist measures such as the 100%+ tariffs on goods such as Harley-Davidson motorcycles. Frictions in trade talks had also persisted, especially around India’s protection of farmers. While Modi has avoided naming Trump directly, he has framed the standoffs in terms of national self-reliance, evoking parallels to India’s fight against colonialism. In addition, he has pledged to protect small businesses and farmers while hinting that India may pivot trade ties towards China, Japan or Europe.
On the other hand, JD Vance has chosen to justify these tariffs as “secondary sanctions” which are aimed towards Russia to prevent it from profiting off of oil sales. This comes across as hypocritical as during his earlier April trip to India, he had praised the US-India partnership as a “win-win”.
Economists predict that the tariffs will slow but not derail India’s growth with Morgan Stanley and Citigroup forecasting less than a 1% decline in GDP growth. However, unlike the circumstances of the 2008 global financial crisis, India is now far more integrated into the world economy. Therefore, the disruption to global supply chains are being felt more rapidly.
Article: https://www.nytimes.com/2025/08/27/business/india-tariffs-trump-russia-oil.html