Trump's sharp India criticism on tariffs, Russia oil corner Modi as rift deepens

Straits Times

4 hours ago

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- Any expectation of the camaraderie that Indian Prime Minister Narendra Modi enjoyed with US President Donald Trump during the latter's first term in office – united in part over the common threat of China – has all but evaporated.
India underestimated just how transactional Mr Trump would be in his second term in power, as he has made little distinction between friends and adversaries.
Ties have unpredictably and quickly gone south as Mr Trump has torn into India over its long-standing ties with Russia and the slow pace of negotiations for an India-US trade deal.
The strain in US-India ties is a challenge for Mr Modi, who also faces domestic calls not to cave into Mr Trump's demands on trade and oil imports from Russia.
India has benefitted from cheap Russian energy imports, which the US leader claims is helping to fund Russia's invasion of Ukraine .
Mr Trump's vow to 'substantially raise' tariffs on Indian exports to the US from the already substantial 25 per cent because of New Delhi's Russian oil imports, is an indication of his administration's priorities in achieving broader geopolitical goals, say analysts.
'This (oil sanctions) is obviously a pressure tactic the US is using on Russia to get an outcome of its choice in the Ukraine war. We are collateral damage,' Mr Ashok Malik, a partner at the Asia Group business consultancy, told The Straits Times.
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'I think things are very challenging at this juncture. It is the most challenging in a long, long time,' Mr Malik said.
Mr Trump came into power promising he would end the war in Ukraine on his first day in office. But a long-term ceasefire has not materialised, and Russia has instead intensified its strikes on Ukraine, much to Mr Trump's frustration.
India-Russia-US nexus
'India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits,' Mr Trump wrote on his Truth Social platform on Aug 4.
'They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA.'
Mr Trump has lumped Russia and India together, calling them 'dead economies' in another Truth Social post on July 31, despite the fact that India is the world's fourth-largest economy by nominal GDP after the US, China and Germany.
India has a longstanding relationship with Russia dating ba ck to the Cold War, and is the among the largest importer of Russian oil along with China .
It imported about 1.75 million barrels a day from January to June 2025, up 1 per cent from a year ago, according to Reuters.
On Aug 4, the Ministry of External Affairs called the US President and European Union 's targeting of India for buying Russian oil 'unjustified and unreasonable.'
'India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict. The United States at that time actively encouraged such imports by India for strengthening global energy markets stability,' the MEA said in a statement.
'India's imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by the global market situation. However, it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. '
The European Union had imposed sanctions on Russian-backed Indian refiner Nayara and banned the import of refined oil made from Russian crude.
In particular, New Delhi called out the United States for its continual imports from Russia of 'uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers as well as chemicals.'
Mr Trump is not the first US president to disapprove of India's ties with Iran and Russia.
But previous US leaders like Mr Joe Biden and Mr Barack Obama chose to look the other way due to the strategic calculation of India's importance as a fast-growing economy a nd as a counter to China in America's Indo-Pacific strategy.
In any case, India's ties with Russia are also not what they were once, as Russia has drawn closer to China and Pakistan, while India has grown closer to the West.
The South Asian giant has also been diversifying its defence weapon purchases to include products from the US and Israel.
But that doesn't mean India can walk away from the Russia relationship as desired by Mr Trump, according to Mr Nandan Unnikrishnan, a Distinguished Fellow at the Observer Research Foundation, a New Delhi-based think tank.
'We need warm relations. India is a growing economy; it is going to consume natural resources and Russia is a country that has every element in huge abundance. We will end up buying a lot of resources,' he said.
US-India tariff negotiations
Mr Trump is also frustrated that a trade deal with India to his liking has so far not materialised.
He has used tariffs to force countries that have a trade surplus with the US into what he claims is a more reciprocal bilateral trade relationship.
The US is India's largest export market, with exports reaching US$86.51 billion (S$111.37 billion) from April 2024 to March 2025. India's imports from the US were US$45.33 billion for the same period, according to Indian government figures .
While both countries are still locked in negotiations, New Delhi has refused to grant the concessions that the Trump administration is seeking, including the opening up of heavily protected agriculture and dairy sectors to US imports.
More than 60 per cent of the Indian population depends on these two sectors for their livelihoods in some form or another. Farmers have opposed opening up of the agriculture and dairy sectors , arguing they would not be able to withstand competition from US agriculture. Unlike US farms, India's farms are small, fragmented and hardly mechanised .
In another post on Truth Social on July 30 , Mr Trump criticised India for imposing the most 'strenuous and obnoxious' tariffs in the world.
India's refusal to give in to Trump for now may also be seen as a recognition that it is not just trade interests which are at stake.
'Trump has not only unleashed a trade war but is also deploying commercial instruments for geopolitical ends,' India's former foreign secretary Shyam Saran wrote in The Indian Express newspaper on Aug 4.
'These actions threaten India's core interests and its ability to follow a policy of strategic autonomy, which every government, irrespective of its political colour, has remained wedded to since Independence,' he said. 'We should not treat the current disruption in India-US relations as just a trade dispute. It is much more than that.'
Mr Modi's response to Mr Trump's belligerent language, which has pushed the Indian prime minister into a corner domestically, took a nationalistic tone.
'The world economy is facing instability and uncertainty. In such times, countries are focusing solely on their own interests. India, too, is on the path to becoming the world's third-largest economy and must remain alert to its own economic priorities,' Mr Modi said in his constituency of Varanasi on Aug 2, even before Mr Trump's latest escalation.
'At a time when the world is going through uncertainty, let us take a pledge to sell only Swadeshi (made in India) goods from our shops and markets. Promoting made-in-India goods will be the truest service to the country.'
Political watchers noted that it would be very difficult for the Indian Prime Minister to give any large concessions in the trade deal, given the growing anger within India towards Mr Trump.
Even the right-wing Hindu nationalist ecosystem, which has been very supportive of the US president, is angry at what it perceives as a series of other slights to India.
This includes Mr Trump's statements on how he engineered the ceasefire between India and Pakistan, after the neighbours were embroiled in a military conflict over a terror attack in Kashmir, and Mr Trump's subsequent hosting of Pakistan's Army chief Asim Muneer in the White House.
'Mr Modi doesn't have much space to manoeuvre on the trade deal. The economic and political costs of accepting US demand are something this government will find difficult to swallow,' said Dr Biswajit Dhar, a trade expert and former professor at Jawaharlal Nehru University.
'We have to wait and watch. What the Trump administration has done is push India into a corner.'