Editor’s note: On August 6th Donald Trump announced that the additional tariff he had threatened to impose on Indian goods would be 25%, bringing the total tariff rate to 50%.
Students of Gurukul school of Art work on artwork of U.S. President Donald Trump and Prime Minister of India Narendra Modi, in Mumbai
On August 4th Donald Trump took to Truth Social, his social-media platform, to berate India: because the country’s “massive” oil purchases fund “the Russian War Machine”, he said, it would suffer substantially steeper tariffs than the 25% the president slapped on the country last week. In some ways the president is not wrong: Russia supplied a negligible 0.2% of India’s oil imports before the war in Ukraine. Since then, it has become India’s biggest supplier, providing between 35% and 40%. But Mr Trump’s anger also hints at his worsening relationship with Narendra Modi, India’s prime minister.
Months-long negotiations between the two countries towards a “mini-deal” have shaved just a percentage point off the original threat of 26% tariffs on Indian exports to America. The levies, set to hit a week after a fiery executive order dated July 31st, do not yet include the Russia penalty. Previously, Mr Trump has complained about bilateral trade worth $190bn. India had hoped this would be a happy sign of ever closer ties. In Mr Trump’s view, though, it is bad news: at almost $46bn, America runs a “MASSIVE TRADE DEFICIT WITH INDIA!!!”
Few in India seem in the mood for compromise. In a defiant public address on August 2nd Mr Modi avoided name-checking the American president but urged economic self-reliance at a time of global uncertainty. Anonymous Indian officials are briefing international media on India’s right to Russian oil. America’s negotiation team is expected in Delhi, as planned, for the sixth round of talks starting on August 25th. Even so, Ajit Doval, the national security adviser, is due to visit Moscow on August 5th. Subrahmanyam Jaishankar, India’s foreign minister, will reportedly follow later this month.
This marks a striking change from Mr Trump’s first term, when the American president and Indian prime minister filled stadiums from Texas to Gujarat in celebration of a blossoming bond between the two countries. India clinched deals for defence equipment and tech usually reserved for NATO allies and some exemptions from sanctions on its dealings with Russia. A mutual disquiet about China’s rise lent the relationship urgency. As a result, India welcomed Mr Trump’s comeback. According to a poll in 2024 by the European Council on Foreign Relations, a think-tank, 84% of Indians believed Mr Trump was good news for their own country—the highest among all 24 countries polled.
But despite Mr Modi’s outwardly friendly reception at the White House in February, one journalist briefed on the visit describes Indian diplomats as “stunned” by the “lack of respect” America’s president showed India’s prime minister behind closed doors. Mr Trump has demanded that India buy more American weapons. He used a military plane to deport illegal Indian migrants in handcuffs. Trade disputes between the two countries in Mr Trump’s first term look like “an early sign of the madness that was to come”, concedes one former Indian ambassador.
Economic assessments of the fallout from MAGA tariffs are shaky. India’s Bank of Baroda thinks they may lop 0.2 percentage-points from the growth rate in the 2026 financial year—though the economy would still expand at around 6.5%. Indian jewellery and textiles would be among the sectors hardest hit, according to India’s Axis Bank. Existing tariff exemptions for pharmaceuticals and electronics seem to have survived. As India is the world’s largest generic-drugs exporter, this will be a relief. It is also experiencing an electronics-export boom. Trade experts assume that Apple will keep making most of its American-sold iPhones in India. However, companies may be wooed by lower tariffs elsewhere. India’s big competitors—such as Indonesia, Malaysia and Vietnam—all ended up facing American tariffs of 19% to 20%.
Even India’s few reliably pro-American voices are losing faith. Mr Jaishankar, known for his patient decades-long campaign to corral sceptical compatriots into American arms, has mounted no recent defence of Mr Trump. Instead, on August 4th he said that: “We live in complicated and uncertain times. Our collective desire is to see a fair and representative global order, not one dominated by a few.” A hawkish foreign-policy analyst now uses a term usually reserved for China, saying that India should “de-risk” from America. Similarly, India’s small club of free-market economists has stopped arguing for India to unilaterally lower its tariffs. One foreign-affairs insider describes how, under previous administrations, the view was that “America cannot be trusted”. Now, she says, India “will go back to thinking that way”.
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