【Text by Observer Net, Qi Qian】
A new round of India-Pakistan conflict, allegations of election fraud, Trump's tariff threats, and deteriorating U.S.-India relations...
Recently, major media outlets have noticed that India is in a difficult situation both internally and externally. This week, U.S. President Trump announced a 50% tariff on Indian goods, criticized India for purchasing Russian energy, and the once-closely tied relationship between the two countries came to an abrupt end. Immediately, there was a wave of public outrage across India, with the opposition mocking the government as "not daring to confront Trump" and "surrenderists." With elections, economic pressure, and disputes over India-Pakistan ceasefire, Prime Minister Modi faces significant challenges.
"At the age of 74, Modi is experiencing one of the most difficult periods of his 11-year rule," Reuters wrote on August 8.
The report said that Modi has begun to counterattack. On the 7th, Modi stated that he would never sacrifice the interests of Indian farmers, saying, "I am ready. India is ready." According to Indian officials, after Trump imposed additional tariffs, India suspended its plans to purchase American weapons. At the same time, Modi increased interactions with countries such as Russia, China, and Brazil. It is reported that Modi plans to visit China and meet with Russian President Putin.
The tasks facing Modi are extremely challenging. Some Indian scholars say that Modi's "brand value" is rapidly declining, and he needs to reposition himself. The scholar warned that the upcoming Bihar state elections are crucial, saying, "Because in India, election results decide everything."
In this context, India's readjustment of its relations with China is seen as a key move to balance against the United States. Lin Minwang, researcher and vice dean of the Institute of International Studies at Fudan University, told Observer Net that at this stage, India is playing part of a "balancing act" in foreign policy. However, how far Modi can go in improving relations with China, the Shanghai Cooperation Organization (SCO), and Russia remains to be observed.
Modi Faces Criticism for "Surrendering" to the U.S.
On June 6, Trump announced additional 25% tariffs on Indian goods, bringing the total tariff level to 50%. This additional tariff measure will take effect on August 28. Trump claimed it was to "punish" India for continuing to purchase Russian oil.
Before this, Trump had been pressuring India intensively, making harsh remarks on social media, accusing India of pressuring it to stop purchasing Russian weapons and energy. He once criticized India's high tariffs as "severe and annoying," and called India and Russia "dead economies."
In February this year, Modi met with Trump at the White House. Visual China
The report said that less than six months ago, Trump warmly welcomed Modi at the White House, calling him "a great friend." At that time, U.S.-India diplomatic relations were seen as a fortress against the rise of China. However, after the threat took effect, India would face one of the highest tariffs in the world. This led to serious turmoil in U.S.-India relations and placed the Modi government in a dilemma.
The Financial Times published an article mentioning the tense U.S.-India relations in the 1970s. At that time, India went to war with Pakistan to facilitate the independence of Bangladesh, and then U.S. President Nixon sent troops to force Indian Prime Minister Indira Gandhi to withdraw.
"Half a century later, many Indians fear their country may again walk down a path of intense conflict with the United States," the article mentioned, noting that Indira Gandhi gained a large following for resisting Nixon, and many Indians "wonder if Modi will be willing to stand up to the world's most powerful country like his predecessors."
Rahul Gandhi, leader of the opposition in the Indian Parliament and grandson of Indira Gandhi, wrote: "Modi had better not let his weakness override the interests of the Indian people." He also mocked Modi as "Narendra Surrender."
Trump's threats intensified Indian hostility, with many people angry at Trump's unilateral criticism of India. Previously, the United States had tolerated India's purchase of Russian oil until Trump recently took a tough stance toward Russia. Former Indian Foreign Minister Shyam Saran questioned: "If buying Russian oil is so important, why didn't he mention China? Why only target India?"
Rahul Bhatia, an India analyst at Eurasia Group, said: "Although Modi has invested a lot of effort in U.S.-India relations and hopes to quickly reach a trade agreement, he cannot be seen as yielding to U.S. pressure, especially domestically."
Bhatia said: "The opposition has already criticized Modi for not daring to confront Trump, and even Modi's supporters no longer hold a favorable view of the U.S. president."
In and out of trouble, Modi urgently needs to "find a way out."
India is one of the first countries to engage in trade negotiations with the United States. Previously, the U.S. and India had pledged to conclude the first bilateral trade agreement before autumn and double bilateral trade to over $500 billion by 2030. There were speculations that the U.S. and India would sign the agreement during the Quad leaders' summit. But since the May India-Pakistan conflict, relations between the U.S. and India began to deteriorate.
Trump has always claimed that he successfully calmed the India-Pakistan conflict. However, according to sources familiar with the U.S.-India trade negotiations, Modi publicly denied using trade as a lever to achieve a ceasefire, which made Trump very angry. India claims that Pakistan initiated the end of the conflict.
"I do believe that the U.S. president is upset because India did not publicly support his interpretation of mediating the India-Pakistan conflict," said Rudra Chaudhuri, director of the Carnegie India Center. "My current view is that everyone holds their own opinions. But a way out needs to be found."
According to analysis cited by the Financial Times, the Modi government may have made a mistake by viewing the U.S. tariff negotiations as a routine trade negotiation, rather than a political exercise with a "transactional leader" who needs a high-profile victory to demonstrate his political base.
Walter Lade, a senior lecturer in international relations at King's College London, told the South China Morning Post that Trump's threats "have caused fluctuations in what was originally stable and deepening economic and strategic relations." He said that while India's macroeconomic losses may not be significant, politically sensitive, labor-intensive industries such as jewelry, textiles, and chemicals will be particularly affected.
"Jewelry alone has an export value of about $9 billion annually, and a 50% tariff could lead to many such products being rejected from the U.S. market," Lade added, noting that the number of unemployed workers in the export manufacturing sector may increase significantly.
India's exports to the U.S. account for 20% of its total exports and 2% of GDP. According to a report by Bank of Baroda, India's exports to the U.S. amounted to approximately $77.5 billion in 2024, with a growth rate of 10.3% over the past 30 years.
Sri Vidya Jandhyala, associate professor of management at the Singapore University of Social Sciences, said that the new tariffs put Indian companies at a disadvantage compared to their competitors, as Indian companies previously enjoyed a relative advantage due to their nationality.
"Modi is experiencing one of the most difficult periods of his 11-year rule," Reuters noted. The ceasefire agreement between India and its arch-rival Pakistan is controversial, and Modi's age, which is approaching 75, is once again being questioned. The sharp deterioration of U.S.-India diplomatic relations, all these factors together pose unprecedented challenges to Modi's leadership.
Additionally, Modi must respond to accusations from the opposition about electoral fraud in the 2024 general election. Next month, the state of Bihar will hold elections. Analysts say that due to the U.S.-India tariff issue and reduced employment rates, Modi's party will find it difficult to retain power in this state.
In summary, analysts say that Modi faces a very difficult task.
Rashid Kidwai, guest researcher at the India Observatory Research Foundation think tank, said: "Modi's brand value is now rapidly declining, and he needs to reposition himself. If he loses the election in Bihar, his luster will be completely gone. Because in India, elections decide everything."
Modi Strikes Back, "India Suspends Purchase of U.S. Weapons Plans"
Analysts generally believe that faced with the deterioration of U.S.-India relations, Modi has almost nowhere to retreat. Indian political commentator Arati Jha said: "In some ways, Indo-U.S. relations revolve around the personalities of Trump and Modi. So now that the situation has worsened, Modi has no buffer space at all. In India, people are quite disappointed, this strong leader failed to show the strength and determination he claimed to have."
However, Modi has started to strike back. On the 7th, he said that the government is prepared to support farmers at any cost, but did not mention the dispute over opening up agriculture and dairy sectors to lower Trump's tariffs, nor did he comment on whether to reduce or stop importing oil from Russia.
"India will never compromise on the interests of farmers, herders, and fishermen," Modi said at a public event on that day. "I fully understand that I personally may pay a very heavy price, but I am ready. India is also ready."
The Financial Times said that Modi's tone has been relatively restrained so far, but with a hint of firmness. The South China Morning Post said that Modi's latest statement is widely interpreted as an indirect criticism of Washington.
The ruling Bharatiya Janata Party (BJP) of India posted pictures on social media to support Modi. The image shows Modi being hit by stones, bricks, and a dagger depicted as a tariff, while protecting a farmer carrying a plow.
BJP X account
According to Reuters on August 8, three informed Indian officials revealed that India has suspended its plans to purchase new U.S. weapons and aircraft. The report said that this is the first time India has clearly expressed dissatisfaction after Trump's tariff threats caused the bilateral relationship to drop to its lowest level in decades.
Two informed sources said that India had planned to send Defense Minister Rajnath Singh to Washington in the coming weeks to announce part of the procurement plan, but the trip has been canceled. Raytheon, Boeing, Lockheed Martin, and General Dynamics are affected.
One of the informed sources said that once India clarifies the direction of the tariff issue and bilateral relations, defense procurement can continue, but "it will not be as fast as expected." Another official said that the Indian government has not received written instructions to suspend procurement, indicating that the government can choose to change its position quickly, although "there has been no progress so far."
According to the report, previously, India was discussing the purchase of "Stryker" armored vehicles produced by General Dynamics Land Systems, as well as "Javelin" anti-tank missiles developed by Raytheon and Lockheed Martin. Singh had planned to announce the purchase of six Boeing P8I reconnaissance aircraft and supporting systems during his visit to the U.S.
Boeing, Lockheed Martin, and General Dynamics have raised questions with the Indian and U.S. governments. Raytheon has not responded to requests for comments.
Enough, India is turning to China and Russia?
Reuters reported that in addition to the above positions, other signs of India's response to Trump include Modi's plan to visit China in the coming weeks and possibly meet with Russian President Putin. This indicates that India's relations with these two countries may be readjusted.
According to reports, when Trump issued the latest tariff threats, India's National Security Advisor Ajit Doval was in Moscow discussing India-Russia defense and security cooperation, oil sanctions, and the upcoming Modi-Putin summit. Soon after, India's Foreign Minister S Jaishankar will visit Russia later this month to attend a government committee meeting on trade and economic cooperation.
Although the U.S. imposes additional tariffs to curb India's purchase of Russian oil, analysts say this may not be realistic.
Lade said that although India has sufficient infrastructure to shift to suppliers in the Middle East or Africa, Russian oil still accounts for about 35% of India's imports. He cited data stating, "Russian oil is paid outside the dollar system via sea transport, and until recently was sold at a discount, saving India $3.8 billion in the 2024-25 fiscal year alone."
According to data from the Indian embassy in Russia, bilateral trade between India and Russia reached a record high of $68.7 billion in the 2024-25 fiscal year, nearly 5.8 times the $1.01 billion before the pandemic. Both sides expect to achieve a bilateral trade target of $100 billion by 2030.
This also involves sovereignty issues. Lade said, "New Delhi doesn't like being told whom it can or cannot buy energy from," and believes that Trump's move "is more about creating leverage for his broader pressure on Russia rather than targeting India itself."
Oil terminal at Murmansk port, Russia
Given Trump's statements, the Indian government may also face pressure to adopt a "stronger stance" on this issue.
An Indian insider said that Trump's threats and the growing anti-American nationalism in India "make it politically difficult for Modi to shift from Russia to the U.S."
Rajan Kumar, associate professor at the School of International Studies, Jawaharlal Nehru University, said: "Trump could have pressured India to diversify, instead of issuing orders. Now, the opposition is already pressuring the government. Therefore, we can anticipate that the Modi government will take some hardline stances, although New Delhi will still try to negotiate with the U.S. first."
On July 7, Modi also called Brazilian President Lula to discuss the tariff issue. China, Russia, and Brazil are founding members of the BRICS group.
Kumar said that trust between India and the U.S. over the past two decades has now stopped, and now it is "complete distrust."
"New Delhi originally thought the U.S. would not target India for its geopolitical interests, but that did not happen," Kumar said regarding India's relations with China and Russia. "Now, India is also changing its foreign policy trajectory to some extent."
At a time when U.S.-India economic and trade relations are in a low point, India's readjustment of its relations with China is seen as a key move to balance against the United States.
Lin Minwang, researcher and vice dean of the Institute of International Studies at Fudan University, told Observer Net that Modi's visit to China is a positive signal for the development of the Shanghai Cooperation Organization (SCO) and the improvement of Sino-Indian relations. However, interpreting this visit through the lens of the U.S. is not accurate, as the itinerary was already determined and not a last-minute decision due to Trump's announcement of increased tariffs on India.
Lin Minwang said that India is "staged" in improving relations with China to send a signal to Washington that India "has not fallen into a geopolitical dilemma and still has choices." At this stage, for India, it is part of a "balancing act" in foreign policy. By improving relations with China and actively participating in SCO activities, India aims to create leverage to resolve its contradictions with the West.
However, Lin Minwang said that Modi has actually been quietly adjusting his "one-sided" policy toward the U.S. since last year. However, how far he can go in improving relations with China, the SCO, and Russia remains to be observed.
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