Trump's tariffs ‘risk pushing India towards Beijing'
But as his frustration grows over a failure to achieve a meaningful peace deal in Ukraine, it was a risk he thought was worth taking.
On Wednesday Trump announced sweeping new tariffs against India. In addition to the 25 per cent levy due from Thursday, Trump announced a further 25 per cent that would take effect in 21 days — a punishment for India's refusal to stop importing Russian oil and gas.
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In India, analysts and politicians are reeling. 'This is the first time in independent India's history that a US president is asking for a public display of subordination', said Sidharth Raimedhi, a fellow at the Council for Strategic Defence Research (CSDR) in Delhi.
India's foreign ministry branded the move 'unfair, unjustified and unreasonable'.
It said in a statement: 'It's extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their national interest.'
Shashi Tharoor, an opposition MP, said Trump's additional 25 per cent tariffs showed a 'double standard'. This has 'not been a particularly friendly gesture', he told local media. 'They have given the Chinese a 90-day break — but the Chinese are importing far more Russian oil than we are.'
For India, Trump's threat is galling. Until recently it had been encouraged to keep buying Russian oil to help keep the price of Brent crude stable.
Janet Yellen, the US Treasury secretary under Joe Biden, said in November 2022 that the United States was 'happy' for India to continue buying as much Russian oil as it wanted. Geoffrey Pyatt, the assistant secretary of state, said in February last year: 'India has played a key role in efforts to stabilise global energy markets through its purchases of Russian crude.'
The perceived hypocrisy is worsened by the fact that the US continues to import Russian uranium hexafluoride for its nuclear industry, palladium for its electric car industry, and various fertilisers and chemicals.
India and the US — whose bilateral trade is worth more than $190 billion — have historically irreconcilable differences which hinders them at the negotiating table. 'India is unable to shed protectionism beyond a point,' said Ankit Tiwari, a research associate at the CSDR. Key issues which derail talks include India's resistance to opening up agricultural markets — the so-called 'third rail' of Indian politics.
Closed-door trade talks in June are said to have broken down after five rounds despite technical agreements on most issues. Officials on both sides blamed mixed signals, bitterness and political misjudgment.
India-US relations have been under greater strain since Trump claimed credit for mediation during the country's recent clashes with Pakistan. India tacitly refused to give Trump credit, while Pakistan publicly thanked Trump. India's position was that it negotiated directly with Pakistan.
How Narendra Modi, the prime minister, responds now will be critical at home and abroad. The approach of Indian politicians is usually to appease Trump — an attitude that yields mixed results.
'India has been adopting a policy of appeasing the Trump team even before he took office,' said Raimedhi. 'There was a sense that India needed to get on the right side of Trump, and the only way to do that was to offer a trade deal. We did put all our eggs in that basket.
'India was conceding on things in an unprecedented manner — agreeing to import more American cars, for instance. So there's nothing to blame India for on that front. It appears it's more political. It's a psychological thing.
'If you show eagerness and weakness, Trump will try and take everything he can get.'
Yet over the past few days the winds appear to have changed. Members of Modi's party, the BJP, came out openly criticising Trump, who has been increasingly ridiculed on Indian right-wing social media platforms.
In terms of next moves, the Indian government 'will be split', said Raimedhi.
Tiwari added: 'The Indian government's response will depend on whether it assesses the trade deal as a failure of appeasement and decides on a course correction, meaning giving more optical wins to Trump, or decides Trump's demands are unreasonable and adopts a harder negotiation posture in the next round of talks.'
Monish Tourangbam, senior research consultant at the Chintan Research Foundation in Delhi, said the negotiations 'will play out on two levels'. For one, there is the 'usual bureaucratic business of negotiation'. Further trade talks are scheduled for August 25.
But negotiations will also have a public face. 'The bilateralness of it, and the public, acerbic comments — these are something India will have to deal with on a domestic level. We might just have to wait out the Trump storm, like any other country.'
In the case that negotiations failed, the risk is that the world's largest democracy might nudge closer towards Russia and China. 'I don't know if it's likely, but its definitely a possibility,' said Raimedhi.
Talks have already begun between the usually hostile neighbours. Modi is expected to visit China this month for the Shanghai Cooperation Organisation summit, his first trip to the country since the Galwan clash in 2020. He will be joined by Xi Jinping and Vladimir Putin, among others. The summit is set to begin on August 31.
Nonetheless, much of this may be Delhi posturing. 'There is going to be a lot of sound and fury about shifts in geopolitical orientations — the West being unreliable; India moving towards the Global South. But the broader structural reasons India moved towards the West, if you look at all the institutional linkages — the political circus playing out is not enough to shift the structural changes we've seen over the last decades,' said Tourangbam. 'There may be a lot of bargaining chips, but I don't see a substantial shifting on the ground.'
He described a substantial shift towards China as 'far-fetched'.
The Indian government is said to have asked ministers to see what more may be offered to the US before negotiations at the end of the month. Analysts say that Indian oil refineries may have already started to reduce Russian oil purchases.
Meanwhile, India could also commit itself to more defence purchases from the US as hope remains for a diplomatic resolution.
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