The recent imposition of a 25% tariff by the United States on Indian goods has left India deeply disappointed. While some level of tariff was anticipated, the severity of the hike has come as a shock. Many had hoped that the perceived personal rapport between U.S. President Donald Trump and Indian Prime Minister Narendra Modi would dampen such a punitive measure. Yet, the supposed camaraderie between the two heads of state, has evidently failed to influence Washington’s decision which has only revealed the limits of diplomatic optics in the face of hard geopolitical calculations. The U.S. justifies the tariff hike by citing India’s continued trade engagement with Russia, particularly in energy and defense. India, for its part, has prioritized its own economic and strategic interests, securing discounted oil and military hardware from Moscow-a pragmatic move given its energy needs and security imperatives. From New Delhi’s perspective, the conflict in Ukraine remains a distant concern, and India sees no reason to compromise its own welfare for a war in which it has no direct stake. India had been equi-close with both nations and had abstained from voting against Russia in the UN. At the same time, India is a crucial member of the Quadrilateral Security Dialogue (QUAD), that includes the USA, Australia and Japan, meant to counter the growing military influence of China. The expectation that nations should blindly align with U.S. demands, especially when their own interests are at stake, reflects a flawed assumption in Washington’s foreign policy approach. The US under Trump has been on a reckless Tariff onslaught across the globe and has annoyed traditional alliance partners and friends in the free world. Economically, the 25% tariff will have far-reaching consequences. Indian exports to the U.S., ranging from textiles to engineering goods, will now face higher costs, making them less competitive in the American market. This could lead to reduced demand, hurting Indian manufacturers and exporters. On the import side, critical components for India’s tech and manufacturing sectors, many of which come from the U.S., will become more expensive, potentially disrupting supply chains and increasing production costs. The ripple effects could dampen economic growth, affect employment, and strain bilateral trade relations further.The tariff dispute serves as a stark reminder that strategic balancing acts come with trade-offs. India’s attempts to maintain relationships with both the U.S. and Russia—while beneficial in the short term—were bound to face friction as global tensions escalate. The U.S. move underscores a harsh reality- in an era of great-power rivalry, neutrality is increasingly difficult to sustain without consequences. New Delhi must now reassess its economic dependencies and diplomatic strategies, ensuring that its partnerships are resilient enough to withstand external pressures. For India, the path forward involves diversifying trade ties, reducing over-reliance on any single market, and investing in domestic self-sufficiency where possible. However, the options will not be able to offset the expected impact caused by loss of US markets . While the U.S. tariff was not unexpected, yet the hike certainly was. For India, the lesson is that trying to be neutral is an impossible task like wanting the cake and eating it too.
Tuesday, October 7, 2025