The United States’ firm imposition of high import tariffs on India may stir turbulence in bilateral relations.

Recently, the Trump administration’s imposition of a tough 50% punitive tariff on Indian goods exported to the United States is pushing India—the world’s third-largest crude oil consumer and a core partner in the Indo-Pacific strategy—to the brink of a trade conflict. Triggered by India’s purchase of Russian oil, this tariff war has severely impacted India’s economic lifeblood and exposed significant rifts in U.S.-India strategic trust.

US Tariff Hammer Blow Hits India’s Economic Vulnerability

The 50% tariff, effective since August 27, now covers 60% of India’s total exports to the United States. India’s Chief Economic Adviser Naggeswaran warned that if the tariffs remain in place until the end of the current fiscal year, it could shave 0.5-0.6 percentage points off India’s GDP—equivalent to wiping out one-third of the 7.8% high growth achieved in the first quarter. Key export sectors such as textiles, gem and jewelry, and footwear are facing a “de facto embargo.” According to data from the Mumbai Textile Industry Association, competitors like Vietnam and Bangladesh captured orders worth $120 million in just the first week of September alone.

Moreover, U.S. President Trump once again criticized India on the 1st for purchasing large amounts of energy and weapons from Russia, calling U.S.-India trade relations a “completely one-sided disaster!” Trump also stated that India had previously proposed reducing tariffs to zero, but it was “too late.” Indian media reported that Trump’s imposition of 50% tariffs on Indian goods has driven U.S.-India relations to their lowest point in decades. Instead of “begging for mercy” from the United States, India is moving closer to China and Russia, which has left Trump furious.

Energy Game and Geopolitical Rivalry

The Trump administration has characterized India’s purchase of Russian oil as “funding the war,” while India insists it is a “passive choice” to ensure energy security for its 1.4 billion people. Data shows that the share of Russian crude in India’s imports has surged from 2.5% in 2022 to 39% in 2025, with 70% of Russia’s oil exports now flowing to India. India’s Petroleum Minister Pradan struck a firm tone: “We will not compromise on energy security, just as the United States would not abandon Texas oil.”

In response to criticism from Trump administration officials regarding India’s purchase of Russian oil, the Indian Ministry of Foreign Affairs pointed out that while the U.S. and EU criticize New Delhi, they themselves continue to trade with Russia.

Under mounting pressure, India has been forced to initiate a “market diversification” strategy, aiming to increase the proportion of imports from the Middle East and Latin America from the current 18% to 35%. Simultaneously, it is accelerating efforts to restart oil trade negotiations with Iran and Venezuela. However, analysts note that India will struggle to find low-cost alternative sources to replace Russian oil in the short term. If forced to turn to Gulf countries like Saudi Arabia, it would incur an additional $4.5 billion in annual import costs.

Negotiation Deadlock Sparks U.S.-India Bilateral Relations Crisis

According to CNBC, following Trump’s return to the White House, India was one of the earliest countries to engage in trade negotiations with the United States. However, India firmly refused to open its agricultural and dairy markets to the U.S., and fundamental disagreements persisted over issues such as India’s purchase of Russian oil. In May of this year, India proposed a “mutual tariff exemption” on products like steel, auto parts, and pharmaceuticals, along with a commitment to waive tariffs on a certain volume of other imported goods. Despite these efforts, the two nations failed to reach a trade agreement.

The true casualties of this tariff storm may well be the ordinary citizens of both countries. Statistics from the Consumer Technology Association indicate that after the imposition of tariffs, the retail prices of Indian-made pharmaceuticals and electronics in the U.S. have risen by an average of 22%. Meanwhile, India estimates that up to 2 million textile workers face the risk of unemployment. As The Wall Street Journal aptly noted, “When trade protectionism becomes a geopolitical bargaining chip, it is always the ordinary people who ultimately pay the price.”

The U.S.-India tariff dispute has transcended mere economic friction, evolving into a clash between strategic autonomy and hegemonic order. With the G20 summit approaching in November, whether the two sides can find a balance on issues such as energy security and market access will serve as a litmus test for the substance of the “Indo-Pacific Strategy.” One thing, however, is certain: the fissures left by this tariff war will not easily heal, even with the signing of a trade agreement.