Govt halts US arms deals after Trump slams 50% tariffs on exports

Business Standard

18 hours ago

New Delhi has put on hold its plans to procure new U.S. weapons and aircraft, according to three Indian officials familiar with the matter, in India's first concrete sign of discontent after tariffs imposed on its exports by President Donald Trump dragged ties to their lowest level in decades.
India had been planning to send Defence Minister Rajnath Singh to Washington in the coming weeks for an announcement on some of the purchases, but that trip has been cancelled, two of the people said.
Trump on Aug. 6 imposed an additional 25% tariff on Indian goods as punishment for Delhi's purchases of Russian oil, which he said meant the country was funding Russia's invasion of Ukraine. That raised the total duty on Indian exports to 50% - among the highest of any U.S. trading partner.
The president has a history of rapidly reversing himself on tariffs and India has said it remains actively engaged in discussions with Washington. One of the people said the defence purchases could go ahead once India had clarity on tariffs and the direction of bilateral ties, but "just not as soon as they were expected to."
Written instructions had not been given to pause the purchases, another official said, indicating that Delhi had the option to quickly reverse course, though there was "no forward movement at least for now."
India's defence ministry and the Pentagon did not respond to Reuters' questions. Delhi, which has forged a close partnership with America in recent years, has said it is being unfairly targeted and that Washington and its European allies continue to trade with Moscow when it is in their interest.
Reuters is reporting for the first time that discussions on India's purchases of Stryker combat vehicles made by General Dynamics Land Systems and Javelin anti-tank missiles developed by Raytheon and Lockheed Martin have been paused due to the tariffs.
Trump and Indian Prime Minister Narendra Modi had in February announced plans to pursue procurement and joint production of those items.
Singh had also been planning to announce the purchase of six Boeing P8I reconnaissance aircraft and support systems for the Indian Navy during his now-cancelled trip, two of the people said. Talks over procuring the aircraft in a proposed $3.6 billion deal were at an advanced stage, according to the officials.
Boeing, Lockheed Martin and General Dynamics referred queries to the Indian and U.S. governments. Raytheon did not return a request for comment.
Russian Relations India's deepening security relationship with the U.S., which is fuelled by their shared strategic rivalry with China, was heralded by many U.S. analysts as one of the key areas of foreign-policy progress in the first Trump administration.
Delhi is the world's second-largest arms importer and Russia has traditionally been its top supplier. India has in recent years however, shifted to importing from Western powers like France, Israel and the U.S., according to the Stockholm International Peace Research Institute think-tank.
The shift in suppliers was driven partly by constraints on Russia's ability to export arms, which it is utilizing heavily in its invasion of Ukraine. Some Russian weapons have also performed poorly in the battlefield, according to Western analysts.
The broader U.S.-India defence partnership, which includes intelligence sharing and joint military exercises, continues without hiccups, one of the Indian officials said.
India also remains open to scaling back on oil imports from Russia and is open to making deals elsewhere, including the U.S., if it can get similar prices, according to two other Indian sources.
Trump's threats and rising anti-U.S. nationalism in India have "made it politically difficult for Modi to make the shift from Russia to the U.S.," one of the people said. Nonetheless, discounts on the landing cost of Russian oil have shrunk to the lowest since 2022.
India's petroleum ministry did not immediately respond to a request for comment.
While the rupture in U.S.-India ties was abrupt, there have been strains in the relationship. Delhi has repeatedly rebutted Trump's claim that the U.S. brokered a ceasefire between India and Pakistan after four days of fighting between the nuclear-armed neighbours in May. Trump also hosted Pakistan's army chief at the White House in the weeks following the conflict.
In recent months, Moscow has been actively pitching Delhi on buying new defence technologies like its S-500 surface-to-air missile system, according to one of the Indian officials, as well as a Russian source familiar with the talks.
India currently does not see a need for new arms purchases from Moscow, two Indian officials said.
But Delhi is unlikely to wean itself off Russian weapons entirely as the decades-long partnership between the two powers means Indian military systems will continue to require Moscow's support, one of the officials said.
The Russian embassy in Delhi did not immediately respond to a request for comment.
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