In a move that has surprised everyone in diplomatic and trade circle. President Donald Trump directed the implementation of a 25% tariff on Indian imports that is to be implemented by 1st week of August 2025. This declaration goes hand in hand with a penalty for India’s ongoing purchase of energy and military supplies from Russia.
In his address, President Trump said, “India is our friend, but we have done relatively little business with them because their tariffs are far too high among the highest in the world and they have the most strenuous and obnoxious non-monetary trade barriers of any country.” He also faulted India’s persistent defence and energy relations with Russia, particularly in a period when, in his own words, Russia is “brutally killing Ukraine’s citizens.”[1]
Ironically, while referring to Prime Minister Modi as a “friend” time and again, this tariff declaration seems to convey a contrasting message. If friendship is characterized by cooperation and respect for each other, then retaliatory economic actions indicate something else. It is hard not to wonder if the phrase “friend” is being employed genuinely or tactically.
The Underlying Reason: India’s Energy Trade with Russia
It is clear that one of the fundamental reasons for this tariff imposition is India’s unwillingness to stop importing oil from Russia, even amid persistent geopolitical tensions. But India is not the only country practicing this, China continues to be the biggest buyer of Russian crude oil, followed by a number of European Union states that continue to sustain strong energy relationships with Russia.
India’s Strategic and Sovereign Autonomy
India has always pursued a non-aligned and independent foreign policy, particularly with regard to its defence and energy requirements. The imposition of tariffs in reaction to sovereign choices creates a perilous precedence and risks undermining the concept of strategic autonomy. In addition, India is one of the world’s fastest-growing economies and is an important market for American exports of goods and services. This action can safely be expected to boomerang on the U.S. itself, damaging its own exporters—particularly those that export agricultural products, aircraft, and technology.[2]
Potential Economic Effects
For India, a 25% tariff could have the following serious implications Indian exports to the U.S. could become less competitive, especially in areas such as textiles, steel, pharmaceuticals, and IT services. Small and medium businesses (MSMEs) that are highly dependent on U.S. markets might lose business, resulting in job losses and lost economic momentum. It could force India to impose retaliatory duties, as it has done in cases of trade tension in the past.
Conclusion
This latest tariff demonstrates the delicate balance between diplomacy and economic blackmail. Although the U.S. might try to shape India’s foreign policy options, it has also to acknowledge and respect India’s sovereign choices. Selective targeting, under the cover of words of friendship, only increases scepticism. As international dynamics change, the India-U.S. relationship should be founded on mutual respect, balanced trade, and strategic congruence—not unilateralism and penalization. If America wishes to continue to hold India close as an ally, it has to treat it as not a vassal, but an equal partner.
[1] https://www.politico.com/news/2025/07/30/all-things-not-good-trump-says-hes-imposing-25-percent-tariff-on-india-
[2] https://www.theguardian.com/us-news/2025/jul/30/trump-imposes-tariff-on-india-plus-penalty-over-ties-to-russia
