India has just 20 days left to steer clear of Donald Trump’s brutal 50% tariffs, and the clock’s ticking loud.
On Wednesday, the former US President unleashed a tariff bomb, doubling duties on Indian goods from 25% to 50%. The reason? India’s continued purchase of Russian oil, something Washington says is helping fund Putin’s war in Ukraine. India, in response, called it “unfair” and “unjustified,” but with the new rate kicking in on 27 August, Delhi’s got limited time to act.
The 50% tariff makes India the most taxed US trading partner in Asia, putting it on par with Brazil, and threatens to slam the brakes on its $86.5 billion annual exports to America. For a country that sends 18% of its total exports to the US, making up 2.2% of its GDP, this is not a small jab. Nomura called it basically “a trade embargo.” Most exporters say they can’t survive more than a 10–15% rise. A 50% hike? That’s lethal.
The damage could be huge. If the tariff stands, it could knock 0.2 to 0.4% off India’s GDP growth this year, pulling it below the 6% mark. Electronics and pharmaceuticals might escape, for now, but labour-intensive sectors like textiles, gems, and jewelry are staring down disaster. Rakesh Mehra of the Confederation of Indian Textile Industry called the move a “huge setback,” and he’s not wrong.
India’s government is still standing its ground, insisting that its energy imports are based on economic logic and energy security. But this move throws a spanner into Modi’s vision of a strong India-US partnership. It’s not just about trade. The US is using tariffs to pressure India on foreign policy, hoping to isolate Russia further. And that’s where things get messy.
India’s former central bank governor Urjit Patel called this situation his country’s “worst fears.” In a recent post, he warned that unless the upcoming trade talks in August move forward fast, this could spiral into a “needless trade war.” India now faces a crucial decision, drop ties with Russia or risk losing a massive trading partner in the US.
Strategically, it’s not an easy call. Russia has been a long-time military and energy partner for India. And while New Delhi has slowly reduced dependency on Russian weapons and diversified its oil suppliers, cutting ties altogether won’t be simple. Dr Chietigj Bajpaee from Chatham House says the relationship with Russia is in “managed decline,” but still too valuable to drop overnight.
On the flip side, some argue this is India’s chance to rethink everything. Ajay Srivastava from Delhi-based GTRI says Trump’s tariff move might push India to deepen ties with China, Russia, and others instead. Modi’s upcoming trip to China for the Shanghai Cooperation Organisation summit could hint at bigger strategic shifts. Talks of reviving the India-Russia-China trilateral may not be just speculation.
Meanwhile, the US wants concessions. In the upcoming August trade talks, they’re likely to push India to open up its agricultural and dairy markets. But these are politically sensitive sectors. Will Modi give in? Or will protecting Indian farmers outweigh the risk of a tariff-driven trade slowdown?
There’s also the larger question, what does this mean for India’s rising status as a China-plus-one hub? Global companies like Apple are betting big on Indian manufacturing, especially in electronics, which, for now, escape the new tariff. But what if the scope widens?
Experts say the current incentive schemes and export promotion programmes may not be enough to shield Indian exporters from such a tariff shock. Nomura points out that unless India provides stronger support or finds alternative markets, the damage could be long-term.
Politically, this is heating up. The opposition, led by Rahul Gandhi, has labelled Trump’s tariff move “economic blackmail.” India’s government says it’ll take “all actions necessary” to protect national interest. But retaliation, while unlikely, isn’t off the table. Back in 2019, India slapped tariffs on 28 US products, including apples and almonds, when Trump targeted Indian steel and aluminium. Those tariffs were only rolled back in 2023. So precedent exists.
All eyes now are on the next 20 days. Whether Modi plays diplomat, strategist, or hardliner could shape not just trade numbers but also India’s global posture. The mega US-India partnership is under fire, and this might just be its biggest test yet.
Leo Cruz brings sharp insights into the world of politics, offering balanced reporting and analysis on the latest policies, elections, and global political events. With years of experience covering campaigns and interviewing world leaders, Leo ensures readers are always informed and engaged.
