USIndia

Even as the United States slaps India with a 50 percent tariff, the highest among all countries so far and one that will push their relationship to its lowest moment in years, one thing is clear: US President Donald Trump is more interested in onshoring than friend-shoring, experts say.

On Wednesday, the US announced an additional 25 percent tariff on India over its import of Russian oil, taking the total to 50 percent. The move caught most experts by surprise as New Delhi was one of the first to start trade negotiations with Washington, DC, and Trump and Indian Prime Minister Narendra Modi have repeatedly admired each other in public statements and called each other friends. Brazil is the only other country facing tariffs as high as India’s.

“The breakdown of the trade negotiations was a surprise,” said Vina Nadjibulla, vice president of strategy and research at the Asia Pacific Foundation of Canada.

“This is a very difficult moment, arguably the worst in many, many years in their relationship and puts India in a very small group of countries that find themselves without a deal and with the highest tariff rates. They now need some pragmatic path forward and need to find a way to rebuild trust,” Nadjibulla said.

While the 50 percent tariffs, set to kick in in three weeks, have come as a shock, there has been a series of events in the past few weeks that hinted at disagreements between the two countries.

Just last week, Trump threatened that he would penalise New Delhi for buying Russian oil and arms, venting his frustration over an impasse in trade talks and referred to both countries as “dead economies”.

Negotiations deadlock

Last year, bilateral trade between India and the US stood at approximately $212bn, with a trade gap of about $46bn in India’s favour. Modi has said in the past that he plans to more than double trade between the two countries to $500bn in the next five years.

As part of the tariff negotiations, New Delhi had offered to remove levies from US industrial goods and said it would increase defence and energy purchases, the Reuters news agency reported. It also offered to scale back taxes on cars, despite a strong auto lobby at home pressuring it not to.

But it refused to remove duties from farm and dairy products, two politically sensitive sectors that employ hundreds of millions of predominantly poor Indians, and a stance similar to some other countries like Canada.

There are also geopolitical layers to what was supposed to be a trade conversation, pointed out Farwa Aamer, director of South Asia Initiatives at the Asia Society Policy Institute in New York.

A very public one was the difference in perception on how the latest clash between India and archenemy Pakistan in May was brought to an end. Trump has repeatedly said that he mediated a ceasefire. India has repeatedly said that Trump had no role in bringing about a truce and has said that Modi and Trump never spoke during the conflict.

Pakistan, on the other hand, has said it will nominate Trump for the Nobel Peace Prize and has so far walked away with deals with the US to explore its reserves of critical minerals and oil as its efforts to reset ties with the US play out after years of ambivalence under former US President Joe Biden, said Aamer.

All of this has caused unease for New Delhi, which is now trying to navigate a tough road. “This will test India’s foreign policy,” said Aamer, “and the question is if we will see it grow with the US even as it maintains its ties with Russia,” its longstanding defence and trade partner.

New Delhi has called Wednesday’s tariff “unfair, unjustified and unreasonable” and said its imports of Russian oil are based on its objective of securing the energy needs of its nation of 1.4 billion people.

But beyond that, “India doesn’t want to look weak”, said Aamer. “India has this global standing, and Modi has this global standing, so it has to hold its own. It will maintain its stance that its national security is driving its foreign policy.”

Robert Rogowsky, a professor of international trade at the Middlebury Institute of International Studies at Monterey, said he expected “very creative diplomacy” in the “near term” as India and the US try to reset ties despite tensions.

“Strong-arming individuals like Modi will inevitably lead to shifts and counter-shifts,” he told Al Jazeera.

Adding instability

For now, India can focus on strengthening its bilateral trade agreements, said Aamer, such as the one it signed with the United Kingdom last month and another with the European Union, which is currently in the works.

India is also trying to stabilise relations with China –  just as Australia, Canada and Japan have done in recent months since Trump took office and hit allies with tariffs. Modi is planning to attend the Shanghai Cooperation Organisation summit at the end of the month. It would be his first visit to China since the two countries had a face-off in 2020 in the Galwan River valley.

But the trade blow from the US also comes at a time when India has been trying to position itself as a manufacturing hub and as an option for businesses that were looking to add locations outside China.

In April, Apple, for instance, said all iPhones meant to be sold in the US would be assembled in India by next year. While electronics are exempt for now from the tariffs, a country with a 50 percent tariff tag on it is hardly attractive for business, and this just “adds to the instability and uncertainty that businesses were already feeling” because of all the Trump tariffs, Nadjibulla said.

“Trump has made it clear that he’s interested in onshoring rather than friend-shoring.”

New Delhi, India — When Donald Trump returned to the White House in January, many Indian analysts celebrated, arguing that his bonhomie with Indian Prime Minister Narendra Modi would shield the country from the chaos that the United States president could unleash.

The two leaders had effectively campaigned for each other previously, attending joint rallies. They have repeatedly described each other as friends, and in February, Modi became among the first world leaders to visit Trump in the White House.

But six months later, a sobering reality has hit New Delhi, with Trump punishing it with a 25 percent tariff on imports and near-daily threats to increase those levies further because of India’s oil purchases from Russia, as he tries to force Moscow into accepting a ceasefire in its war on Ukraine.

An India-US trade deal remains elusive, and bilateral relations are on a slippery slope, according to some experts. “US-India relations are at the lowest point in decades,” Biswajit Dhar, a trade economist who has worked on several Indian trade deals, told Al Jazeera. Dozens of other countries, including neighbours India has tense ties with, such as Pakistan and Bangladesh, are facing lower tariffs.

Addressing a public rally on Saturday, Modi took a defiant stance against Trump’s tariff assaults. “The world economy is going through many apprehensions. There is an atmosphere of instability,” Modi said.

“Now, whatever we buy, there should be only one scale: we will buy those things which have been made by the sweat of an Indian,” he added.

Modi’s comments come as Indian officials reportedly reject stopping the buying of Russian crude.

Trump has blamed India’s buying of Russian oil for helping finance Moscow’s war on Ukraine. “They [Indians] don’t care how many people in Ukraine are being killed by the Russian War Machine,”  Trump said Monday. “Because of this, I will be substantially raising the Tariff paid by India to the USA.”

So, how did we get here? What are the growing points of discord between India and the US? And could India give up on Russian oil to save its relationship with the US?

What are the friction points in US-India relations?

Modi and Trump might speak highly of each other, but there is a growing number of areas where India and the US are at odds, ranging from trade agreements to strategic alignment.

No trade deal

Trade has long been a sticking point in US-India relations, even as strategic and defence ties have deepened. The US has consistently pushed for greater market access, lower tariffs and stronger protections, especially for its tech, pharmaceutical and agricultural exports. India, on the other hand, has resisted what it sees as disproportionate pressure to open up its economy in ways that may harm its domestic industries and small farmers.

Yet, before Trump, the two countries managed this economic relationship, despite its imbalance: India sold twice as much to the US as the US sold to India. The US wanted access to India’s growing markets, and India needed to export to the US, so keeping ties afloat was important to both.

After Trump first announced tariffs on almost all trading partners on April 1, Indian and US officials began talks to stitch together a trade deal. But disagreements over e-commerce regulation, digital data flows and price controls on medical devices have reportedly stalled progress.

Indian officials were frantically chasing the August 1 deadline set by Trump to avoid tariffs. But despite occasional breakthroughs, like India cutting tariffs on some US goods, the two countries have not yet concluded a full bilateral trade deal.

With negotiations still under way, New Delhi now faces 25 percent tariffs on its exports to the US, and Trump has threatened unspecified additional penalties tied to India’s energy and arms purchases from Russia.

“This is a pressure tactic by Trump,” said Anil Trigunayat, a former Indian diplomat who has served as India’s trade commissioner in New York. “Unlike others, India has not given in to what the Americans want because we have to protect our MSMEs and agriculture,” he added, using the acronym for micro, small, and medium enterprises.

Almost half of India’s population depends on agriculture for its livelihood, making the issue politically sensitive for every Indian government.

“Everybody is playing hardball on both sides, and it’s necessary to arrive at a mutually beneficial solution,” he told Al Jazeera.

India’s close ties with Russia

As Trump’s frustrations with Russia mount over stalled peace talks to end the war in Ukraine, the US president has been looking for more ways to corner Moscow. India’s longstanding relationship with Russia has emerged as a key target for Washington.

While the US views India as a key partner in countering China’s rise in the Asia Pacific, it has grown increasingly uneasy with New Delhi’s continued defence and energy ties with Moscow, analysts say.

At a time when the West has shunned Russian President Vladimir Putin, who also faces an arrest warrant from the International Criminal Court related to the war in Ukraine, Modi visited Russia twice last year. In July 2024, Putin conferred upon Modi the Order of St Andrew the Apostle the First‑Called, Russia’s highest civilian honour.

Russia remains one of India’s largest arms suppliers, and their cooperation spans critical technologies, including missile systems and nuclear reactors. And after Russia’s full-scale invasion of Ukraine in 2022, India ramped up imports of discounted Russian crude oil.

Kashmir ceasefire

After an attack by gunmen in Indian-administered Kashmir’s Pahalgam resort town on April 22, in which 26 civilians were killed, India and Pakistan engaged in their most expansive military conflict in decades.

As the South Asian nuclear-armed rivals traded missile and drone attacks in May, Trump said he intervened and told both countries to agree to a ceasefire, or there would be no trade.

“Fellas, come on. Let’s make a deal. Let’s do some trading. Let’s not trade nuclear missiles. Let’s trade the things that you make so beautifully,” Trump said a few days later in Riyadh.

“I used trade to a large extent to do [the ceasefire]. And it all stopped,” he added.

In India, which has long held the position that all disputes with Pakistan must be settled bilaterally, with no third-party mediation, Trump’s claim that he engineered the May 10 ceasefire that stopped the fighting has sparked criticism of Modi from the opposition.

Modi’s government has insisted that the truce was brought about bilaterally, that Modi did not speak to Trump during the conflict, and that – contrary to the US president’s claims – trade was never discussed as a factor in negotiating the ceasefire. But Trump has doubled down on his claim, mentioning more than 30 times that he brokered peace.

Growing US-Pakistan ties

After the ceasefire between India and Pakistan in May, Trump hosted Pakistan’s army chief, Asim Munir, at the White House. Never before had a US president hosted a Pakistani military boss who was not also the head of state.

That meeting underscored a growing warmth between Washington and Islamabad after years of tense ties, with US military officials crediting Pakistan with helping them capture wanted “terrorists”.

The government of Pakistan also officially endorsed Trump for the Nobel Peace Prize for “recognition of his decisive diplomatic intervention and pivotal leadership during the recent India-Pakistan crisis”.

A day after meeting Munir, Trump called Modi a “fantastic man”, but added that Munir was “extremely influential” in bringing about the ceasefire.

“I love Pakistan,” Trump said, and repeated: “I stopped the war between Pakistan and India.”

As Trump targeted India in his latest tariff assault, he took to his Truth Social platform to reveal that he had concluded a deal with Pakistan, in which they would work together on developing oil reserves. “Who knows, maybe they’ll be selling Oil to India some day!” he wrote.

Later, the US imposed a 19 percent tariff on imports from Pakistan, which Islamabad hailed as “balanced and forward-looking”.

Big Tech hiring, deportation

Days before Modi visited Trump in February, visuals emerged of Indian citizens in the US, shackled in chains, parading towards a US military aircraft, prompting anger in India over the treatment of its nationals.

Returnees, immigrants without documents to stay in the US, described being chained throughout the flight to India, unable to move for nearly 40 hours. Like trade, the issue of deportation has been at the centre of Trump’s re-election campaign.

And it is not just undocumented migrants.

After assuming the presidency, Trump’s administration has also come under pressure from the president’s Make America Great Again (MAGA) base to crack down on H1B work visas, nearly 72 percent of which go to Indians.

Last month, speaking at an artificial intelligence summit in Washington, DC, Trump singled out tech giants like Google, Microsoft and Apple for hiring workers from India. Trump declared, “The days of hiring workers in India are over”, and urged companies to prioritise jobs for Americans and disconnect from outsourcing models tied to India and China.

What’s the latest spark in US-India tensions?

Russia’s war on Ukraine has emerged as the latest trigger, as Trump tried to push Putin into accepting a ceasefire.

On Monday, Trump wrote on his Truth Social platform that “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits”.

Earlier, Stephen Miller, the deputy chief of staff at the White House and one of the US president’s most influential aides, linked India’s buying of Russian crude to financing Moscow’s war in Ukraine.

“What [Trump] said very clearly is that it is not acceptable for India to continue financing this war by purchasing the oil from Russia,” said Miller.

“People will be shocked to learn that India is basically tied with China in purchasing Russian oil. That’s an astonishing fact,” Miller told Fox News’s Sunday Morning Futures.

India imports nearly 2 million barrels of crude oil per day from Russia, making it the second-largest purchaser of Russian oil after China. Russia also tops the list of India’s arms suppliers.

How has India reacted to Trump?

On Monday, India’s Ministry of External Affairs responded sharply, calling the US’s targeting of New Delhi over the buying of Russian oil “unjustified and unreasonable”.

It accused the West of double standards, pointing out how Europe traded more with Russia in 2024 than India did, and how the US continues to import chemicals and fertilisers from Russia.

It also said that the US has “actively encouraged” it to buy Russian oil, so that global crude prices would stay under control while the West could reduce its dependence on Russian energy.

“India will take all necessary measures to safeguard its national interests and economic security,” the statement concluded.

Will India stop buying Russian oil to please Trump?

That is very unlikely, experts say.

India has historically — since independence from Britain in 1947 — cherished its strategic autonomy, including during the Cold War, when it stayed non-aligned. Since the end of the Cold War, it has deepened strategic and military ties with the US while maintaining its traditional friendship with Russia.

“Trump is trying to wean India off its strategic autonomy policy by going after its ties with Russia and membership in BRICS,” Michael Kugelman, director of the South Asia Institute at the Wilson Center in Washington, DC, told Al Jazeera, referring to the Trump’s threats of higher tariffs against members of the bloc that includes several leading nations of the Global South.

“But Delhi is not about to jettison this policy in the face of Trump’s pressure. On the contrary, I expect it to double down.”

Late on Tuesday, India’s National Security Adviser Ajit Doval landed in Moscow. Minister of External Affairs S Jaishankar is expected to visit Russia later this month. And New Delhi has confirmed that Putin will be visiting India later this year, for the first time since the 2022 invasion of Ukraine.

In recent weeks, India has also indicated that it is open to reviving a trilateral grouping including Russia and China, the West’s two big rivals.

“Can the US or Europe give up their strategic autonomy?” asked Jayati Ghosh, economics professor at the University of Massachusetts Amherst. “India has more people than both of them put together. It is absurd to even think that India can give up that,” she told Al Jazeera.

What does this mean for future of US-India relationship?

Echoing Dhar, the economist, Kugelman said that US-India relations have “sunk to their lowest level during the last two decades of strategic partnership”, which began taking shape in the early years of the 21st century.

Non-alignment with foreign governments “remains a critical component of India’s foreign policy”, said Kugelman, adding that he expects that to continue.

And because “India maintained this balance after Russia’s invasion of Ukraine, Trump is penalising [New Delhi] for trying to maintain the balance [between US and Russia],” he said. “[That’s] something that the Biden administration never did,” he added, referring to the previous administration of US President Joe Biden.

Trigunayat, the former diplomat, said that “strategic autonomy for India is more important now than ever. India, with the world’s largest population, has its own approach to strategic autonomy that’s in the DNA of Indian foreign policy.”

In the longer run, Kugelman said that New Delhi will hope that Trump’s ire will eventually blow over – a likely case if Russia agrees to stop fighting in Ukraine.

“In that sense, India may look to redouble efforts to press Putin to end the war,” said Kugelman, “because for now, Trump appears to be taking out his frustration with Putin on India”.