Trump’s risky, flawed & miscalculated bravado against Modi’s India

Introduction

US President Donald Trump’s recent executive order imposing a 50 per cent tariff on Indian imports for the purchase of Russian oil threatens to undo decades of carefully nurtured US-India strategic ties, according to an article by Anna Mahjar-Barducci, a project director at the Middle East Media Research Institute (MEMRI) published by Australian Institute of International Affairs.

Flawed & miscalculated bravado of Trump against India

According to the author, this step may risk alienating India, a democratic powerhouse and a key ally of the US in countering terrorism and balancing China’s influence in the Indo-Pacific, besides the fear that it may push India closer to China. This the author projects being an unintended geopolitical blunder undermining the US interests.

Instead, the author suggests that rather than imposing coercive tariffs the US should take inspiration from the United Kingdom’s pragmatic approach in its July 2025 Free Trade Agreement (FTA) with India, which fosters mutual prosperity, without compromising either nation’s priorities.

The author also highlights the role of India in the Quadrilateral Security Dialogue (Quad) & its contributions to counterterrorism vital to the Indo-Pacific strategy of the United States. According to the author, Trump’s tariffs announced on July 30 and set to take effect on August 27 are therefore likely to jeopardise this trajectory.

Trump has justified the tariffs by citing India’s high trade barriers and purchase of Russian oil. In this, according to the author, Trump has overlooked the reasons behind India turning to the discounted Russian oil to ensure energy security for its 1.4 billion citizens.

As such, punishing India for prioritising its economic stability is perceived as unfair, especially when Western nations themselves continue importing Russian uranium, palladium, and fertilisers. The author therefore urges the US to recognise India’s developmental imperatives & unlock a mutually beneficial trade deal between the two countries.

Referring to India’s insistence on measures like Minimum Support Price (MSP) for farmers the author urges Trump to realise that agriculture employs nearly half the workforce in India. The author instead suggests the US to leverage India’s tech prowess and market potential to complement American innovation in a collaborative spirit, rather than insisting on access to US farm output.

The United Kingdom’s pragmatic approach in signing an FTA with India

In contrast to the US approach, the UK according to the author signed on July 24, 2025 a landmark FTA that respected both nations’ priorities with an aim to double bilateral trade to $120 billion by 2030 boosting sectors like Indian textiles and advanced manufacturing of Britain, while safeguarding sensitive areas like India’s dairy sector.

According to the author, the India-UK FTA demonstrates that trade deals thrive on collaboration, not coercion. By addressing India’s developmental needs, such as protecting its Micro, Small, and Medium Enterprises (MSME) and agricultural sector, the UK has in the opinion of the author crafted a deal that aligns with India’s economic realities while advancing its own interests. The agreement’s focus on digital trade, intellectual property, and sustainable development further underscores the UK’s forward-looking approach offering a blueprint for modern economic diplomacy, according to the author.

Need for the US to recalibrate its approach towards India

In contrast, according to the author, the US tariffs send a troubling signal to India, a nation that has stood shoulder-to-shoulder with the US in combating terrorism and promoting democratic values. Penalising India by eroding its trust and pushing it toward closer alignment with China, especially when Beijing signals openness to deeper ties through platforms like the Shanghai Cooperation Organisation (SCO) does not augur well for the US according to the author.

The author therefore opines, rather than escalating tariffs, the US should prioritise negotiations, that respect India’s priorities while advancing the interests of the US. A deal that balances market access with protection for India’s vulnerable sectors could boost bilateral trade, create jobs, and strengthen the strategic partnership, the author observes.

The author opines that the US stands at a crossroads in its relationship with India, contending that India-UK FTA offers a clear lesson that trade deals succeed when they respect mutual priorities and foster shared prosperity. By contrast, Trump’s imposition of 50 % tariff on India risks alienating India, a vital democratic partner, potentially driving it closer to China and undermining the US interests in the Indo-Pacific according to the author. In the opinion of the author:

Recalibrating the US approach to prioritise collaboration over coercion will not only preserve, but also enhance the US-India partnership, ensuring a stable and prosperous future for both the nations in the opinion of the author, a view this author also shares.

Epilogue

In the short term, a 50% tariff across key product categories imposed by the US are undeniably bound to hit Indian exporters, particularly those in labour-intensive sectors like garments and jewellery. However, this development could also compel Indian industries and policymakers to rethink trade dependencies and expand into new markets across Europe, Africa, and Southeast Asia according to the author.

The emerging situation underscores the importance of improving productivity, quality standards and cost competitiveness. India’s Production Linked Incentive (PLI) scheme and infrastructure investments if implemented efficiently could help neutralise external trade shocks, it is opined.

Lately, in India, growing emphasis is being put on:

· Improving export financing mechanisms;
· Tightening quality assurance norms, and;
· Diversifying trade settlements.

In addition, increasing emphasis also is being put on:

· Including the use of local currencies for cross-border transactions to shield Micro, Small and Medium Enterprises (MSMEs) from volatility.

It is opined, while the new tariffs may seem like a setback, they could also be a defining moment in India’s evolving export strategy as the future lies, not in retaliatory moves, but in:

· Deepening trade partnerships;
· Negotiating favourable FTAs, and;
· Strengthening domestic value chains.

In fine, the question is not just about withstanding tariffs, but whether India can turn adversity into an opportunity and reposition itself as a more resilient, diversified and innovation-driven export economy.

END OF ARTICLE