New Delhi, Aug 24 US President Donald Trump’s recent executive order imposing a 50 per cent tariff on Indian imports for India’s purchase of Russian oil threatens to unravel decades of carefully nurtured US-India strategic ties with this punitive approach risking alienating India, a democratic powerhouse and key ally in countering terrorism and balancing China’s influence in the Indo-Pacific, according to an article.
Rather than imposing coercive tariffs, the United States should take inspiration from the United Kingdom’s pragmatic approach in its July 2025 Free Trade Agreement (FTA) with India, which fosters mutual prosperity without compromising either nation’s priorities, said the article by Anna Mahjar-Barducci, a project director at the Middle East Media Research Institute (MEMRI), published by Australian Institute of International Affairs.
Failure to recalibrate could push India closer to China, an unintended geopolitical blunder that would undermine US interests, it warned.
India’s role in the Quad and its contributions to counterterrorism make it a linchpin in America’s Indo-Pacific strategy. Yet, Trump’s tariffs, announced on July 30 and set to take effect on August 27, jeopardise this trajectory, it observes.
The tariffs, justified by India’s high trade barriers and its purchase of Russian oil, overlook the pragmatic realities driving India’s energy choices. With traditional oil suppliers redirecting to Europe, India turned to discounted Russian oil to ensure energy security for its 1.4 billion citizens. As India’s Ministry of External Affairs emphasised, these imports are driven by "market factors" to maintain "predictable and affordable energy costs". Punishing India for prioritising economic stability is perceived as unfair, especially when Western nations continue importing Russian uranium, palladium, and fertilisers, the article states.
The United Kingdom offers a compelling contrast to the US approach. On July 24, India and the UK signed a landmark FTA, the result of three years of negotiations that respected both nations’ priorities. The agreement eliminates tariffs on 99 per cent of Indian exports to the UK, reduces duties on British goods like whisky and automobiles, and facilitates professional mobility through a Double Contribution Convention (DCC). This pact aims to double bilateral trade to $120 billion by 2030, boosting sectors like Indian textiles and British advanced manufacturing while safeguarding sensitive areas like India’s dairy sector.
The India-UK FTA demonstrates that trade deals thrive on collaboration, not coercion.
The US tariffs, in contrast, send a troubling signal to India, a nation that has stood shoulder-to-shoulder with America in combating terrorism and promoting democratic values. India’s purchase of Russian oil is not a geopolitical slight but a necessity to stabilise energy costs. Its defence procurement, while still 36 per cent Russian in 2024, has shifted significantly toward US and Western suppliers, down from 72 per cent a decade ago. Penalising India risks eroding trust and pushing it toward closer alignment with China, especially as Beijing signals openness to deeper ties through platforms like the Shanghai Cooperation Organisation (SCO), the article further states.
Prime Minister Narendra Modi’s upcoming visit to China for the SCO Summit on August 31, his first in seven years, underscores this risk. A China Daily article, shared by the Chinese embassy in India, highlighted a “thaw” in India-China relations, suggesting that US pressure could inadvertently strengthen ties between the two rivals. As Modi declared at the M.S. Swaminathan Centenary International Conference, India will "never compromise" on its farmers, fishermen, and dairy workers, signalling resolve in the face of external pressure, it observes.
The US must recognise India’s developmental imperatives -- its MSME-driven economy, agricultural vulnerabilities, and energy needs -- to unlock a mutually beneficial trade deal. India’s insistence on measures like Minimum Support Price (MSP) for farmers is not obstructionism but a necessity for a nation where agriculture employs nearly half the workforce. A successful Indo-US FTA could leverage India’s tech prowess and market potential to complement American innovation, mirroring the collaborative spirit of the India-UK deal, the article states.
Rather than escalating tariffs, Washington should prioritise negotiations that respect India’s priorities while advancing US interests. The stalled Indo-US trade talks, bogged down by disagreements over agricultural subsidies and digital trade, could be revitalised by adopting a pragmatic approach. A deal that balances market access with protections for India’s vulnerable sectors could boost bilateral trade, create jobs, and strengthen the strategic partnership, it observes.
The article contends that the United States stands at a crossroads in its relationship with India. The India-UK FTA offers a clear lesson: trade deals succeed when they respect mutual priorities and foster shared prosperity. By contrast, Trump’s 50 per cent tariffs risk alienating a vital democratic partner, potentially driving India closer to China, and undermining US interests in the Indo-Pacific. Recalibrating its approach to prioritise collaboration over coercion will not only preserve but also enhance the US-India partnership, ensuring a stable and prosperous future for both nations.
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