On August 6, U.S. President Donald Trump signed a decree introducing an additional 25% tariff on imports from India, which directly or indirectly imports oil from the Russian Federation. As a result, the total U.S. tariffs for this country will amount to 50%. The tariffs will take effect 21 days after the signing of the document. Why does the United States need this, and what does it threaten India with? Yuri Yarmolinsky, analyst at the Belarusian Institute for Strategic Research (BISR), head of the Center for SCO and BRICS Studies, expressed his opinion.
“Strategic Betrayal”: What Is Happening in U.S.–India Relations?
“Over the past week, India seems to have experienced a kind of cultural-civilizational mini-shock from the decision of U.S. President Donald Trump to impose 50% tariffs on Indian exports, as well as threats of punitive sanctions for importing Russian oil,” Yuri Yarmolinsky said.
According to him, amid previous courtesies and compliments, such a demarche from Washington in New Delhi is likely perceived as the beginning of the end of the era of American benevolence and “was regarded as strategic betrayal.”
“In fact, it refutes the misconception that emerged in the era of liberalization and took deep root among Indian elites—that deep strategic ties with the West, and especially with the United States, automatically guarantee sustainable economic growth,” the analyst noted. “Potential financial losses due to the cessation of Russian oil imports have already been calculated. In such an outcome, energy import costs will rise by more than $20 billion over the next two fiscal years. India is the world’s third-largest importer of energy resources, purchasing more than 80% of consumed hydrocarbons, which makes their regular supplies, including from Russia (share about 40%), a matter of national security.”
“Indian experts largely associate Trump’s assertiveness with his previous tenure—at that time there were similar attacks regarding oil purchases, only from Iran and Venezuela. New Delhi was forced to retreat at great loss to itself, which China immediately took advantage of. In addition, in June 2019, the United States excluded India from the GSP (Generalized System of Preferences)—a system of trade benefits that allowed duty-free exports of goods worth up to $6 billion annually. The conflict was aggravated by Indian laws restricting cross-border data flows, as well as the activities of major American marketplaces in the country,” Yarmolinsky emphasized.
Personal Resentment of Trump or the Promotion of U.S. Interests?
“It is quite possible that Trump harbors personal resentment for the public disavowal by the Indian External Affairs Ministry of his claims to peacemaking in the recent escalation of the India–Pakistan conflict. However, the main irritant for New Delhi has nevertheless been Washington’s demonstrative flirting with Islamabad. This is an example to others of how not to act. For the Indian elites, the Pakistan factor is a more significant and unacceptable pressure than any tariffs and sanctions—equivalent to intrusion into domestic politics,” the analyst explained. “The Indian leadership also understands that Russia is only a formal pretext. Trump’s main task is the implementation of the long-standing American dream—to achieve from India the removal of customs tariffs and restrictions on investment in critical sectors, pushing through a trade deal favorable to himself.”
At stake is India’s economic sovereignty, through the expansion of positions in international trade, including via BRICS. “The American leader, with his sudden and crude escapades, is destroying the entire Indian strategy, forcing it to respond harshly,” Yuri Yarmolinsky said.
The Indian Ministry of External Affairs promptly stated that New Delhi considers U.S. actions “unfair, unfounded, and unreasonable,” and will take all necessary measures to protect its national interests. “Having unequivocally accused the Americans of hypocrisy, the foreign policy department recalled that Indian imports are based on market factors, and their purpose is to ensure the energy security of 1.4 billion inhabitants of the country. In turn, Prime Minister Narendra Modi warned that he will never compromise on the interests of his farmers, even if it means paying an economic price,” the expert noted.
What Will Be the Consequences of Higher U.S. Tariffs for India?
“Raising tariffs may reduce Indian exports to the U.S. by more than $86 billion. About 18% of India’s total exports go there. At the same time, India itself is only the tenth most important trading partner of the U.S. Meanwhile, America’s share in India’s foreign trade is smaller than that of the Gulf Cooperation Council countries and the European Union, and only slightly higher than that of ASEAN and China. Moreover, the functioning of the Indian economy depends incomparably more on Chinese imports than on exports to the U.S.,” Yarmolinsky said.
India’s economy is vast. It is a complex mechanism, in many respects self-sufficient and balanced. Therefore, U.S. tariffs will not fundamentally exacerbate its multiple structural problems. “Protectionism, closedness, the shadow sector, and other weak spots at the moment become advantages, allowing it to operate comparatively stably even in stressful situations. Key Indian exports to the U.S. are still excluded from the list of general measures. Moreover, the tariffs have not yet entered into force; they do not mean an automatic decrease in American exports, the level of political interaction, or a ban on investments,” the analyst noted.
Yuri Yarmolinsky emphasized that the Indian side places certain hopes on the upcoming meeting in Alaska between the presidents of Russia and the U.S., the favorable outcome of which in theory may remove the issue of Russian oil imports from the agenda altogether. “An inspiring factor is also China’s unyielding position, which refused to discuss with the U.S. its trade with Russia and Iran, as well as its industrial policy. As a result, Washington was forced to extend the ‘tariff truce’ for another 90 days in the hope of concluding a trade deal. Much will also depend on the position of the four-million-strong Indian diaspora in the U.S., whose representatives occupy high posts in the American establishment and are quite influential,” he noted. “Chinese observers, analyzing Trump’s actions, emphasize the end of the exalted stage of India–U.S. relations.”
“Indian elites and strategists, by virtue of their national mentality and geopolitical ambitions, will not forget the public humiliation suffered. This is a powerful blow to their pride. In fact, India has become part of American sanctions against Russia, although their economic effect is not yet obvious,” the analyst stressed. “At the same time, the conflict will not become the cause of a strategic rupture between Washington and New Delhi. But it will probably push Indians to trade more with SCO, BRICS, ASEAN, and African countries, while gradually reducing dependence on the United States. The process of de-dollarization within BRICS+ may accelerate, and Asia will once again reflect on the reliability of the West as a partner in general.”
Could New U.S. Tariffs Push India to Strengthen Ties with Russia and China?
“Obviously, India will continue to follow its course of strategic autonomy and multi-alignment. At the same time, even The New York Times writes that the new U.S. tariffs may push it to strengthen ties with Russia and China—despite the record trade deficit and the protracted border dispute with the latter. Incidentally, on the day Trump declared the ‘death’ of the Indian economy, Modi’s visit to Tianjin, China—his first in the past seven years—was confirmed, to participate in the annual SCO summit (he skipped the 2024 summit in Astana),” Yarmolinsky noted.
The expert recalled that the last time Chinese and Indian leaders met was at the BRICS summit in Kazan in October 2024. “In June, China was already visited by India’s National Security Adviser and Minister of Defense, and in July—by the Minister of External Affairs. Chinese Foreign Minister Wang Yi will visit New Delhi on August 18 for talks with National Security Adviser Ajit Doval, who, in turn, was in Moscow last week and met with the President of Russia. Indian External Affairs Minister Subrahmanyam Jaishankar will meet Sergey Lavrov on August 21. A large and representative Chinese delegation took part in the 20th SCO Forum in New Delhi in May. A ‘local’ contextual marker is the fact of the presence of Indian diplomats at a recent reception at the PRC Embassy in Minsk on the occasion of the 98th anniversary of the PLA,” he stressed. “BISR contacts in New Delhi, close to government circles, confirm the high probability of the Indian leader’s visit to China, noting that the resumption of the frozen since 2018 dialogue format RIC—Russia, India, China—is also on the agenda. Indian experts hinted at this in March in Moscow, on the sidelines of the international conference “Russia and India: Toward a New Bilateral Agenda”, referring to the factor of warming India–China relations.”
All this suggests that the upcoming SCO summit promises to be quite rich in interesting events. “Unless, of course, a force majeure situation occurs in its run-up. For example, another acute incident in disputed Kashmir. As a rule, no special pretexts are needed for this; escalation there often occurs precisely around specific events,” the analyst said.
“The trend of consolidation of its driving forces that has emerged within the SCO against the backdrop of U.S. tariff and sanctions manipulations opens a window of opportunity for the long-overdue reset of Belarus–India relations. For the purpose of information and analytical support of the accompanying processes, BISR, together with Indian partners, continues to consistently and purposefully promote the idea of launching a Belarus–India expert dialogue “Nemiga–Yamuna,” Yuri Yarmolinsky added.