【By Observer Net, Wang Yi】Due to the tariffs imposed by U.S. President Trump, India-U.S. relations have shifted from the "honeymoon period" when they were on good terms at the beginning of this year, to a situation where some in India are calling for a boycott of American goods.

Sushant Singh, a lecturer in South Asian studies at Yale University, wrote in the UK's Financial Times on August 12 that the shift from a major partnership to mutual accusations and punitive actions has severely undermined India's strategic ambitions in the Indo-Pacific region within just a few months. Domestically, Modi's weakness in handling the China issue, combined with Trump's rejection of him, could become his new political liability.

The article said that in February this year, Modi stood side by side with Trump, boldly announcing that bilateral trade would be increased to $500 billion by 2030, and hinted at signing a new comprehensive trade agreement, sending positive signals. The close interaction between the two was seen as a symbol of deepening India-U.S. strategic cooperation. Modi also invited Trump to attend the Quad summit, which is planned to be held in India later this year, and used Trump's "Make America Great Again" (MAGA) slogan to create a "Make India Great Again" (MIGA) declaration, saying that the combination of both was a "great partnership toward prosperity."

However, this "great partnership" didn't last for a few months before turning into a huge confrontation. Trump first cited India's "cumbersome and annoying" trade barriers as a reason to impose a 25% tariff on Indian imports; then, citing its purchase of Russian oil and undermining sanctions, he doubled the tariff to 50%, and threatened to increase it further. Trump also explicitly ruled out the possibility of resuming negotiations before the dispute was resolved.

"Trump has imposed the highest tariffs on India among Asian partners, seriously undermining New Delhi's strategic ambitions in the Indo-Pacific," Singh pointed out. Although the foreign ministers of the four Quad countries recently met in Washington, the Quad leaders' summit may not take place this year. The U.S.'s economic pressure could push India towards Russia, and even China, which Modi plans to visit in late August.

On July 1st local time, U.S. Secretary of State Rubio attended a joint press conference of the Quad. U.S. Department of State

This situation contradicts the foundation of U.S.-India relations over the past 25 years. Singh said that the U.S. previously had a strategy of using India as a counterweight to China, but now Trump seems to be abandoning India.

At the same time, Trump turned his attention to Pakistan, offering more favorable tariff treatment and oil exploration agreements after the May India-Pakistan conflict, and treating India and Pakistan equally in diplomacy, which deeply upset India. In June, Trump even had lunch with the Chief of Army Staff of Pakistan at the White House, further intensifying India's dissatisfaction.

The initial 25% tariff imposed by Trump on India took effect on August 7th, and the subsequent additional 25% tariff will take effect on the 27th. Despite India's willingness to purchase more American energy and military equipment, and lower tariffs on industrial goods, it has taken a firm stance on agricultural product standards and quotas, leading to a deadlock in negotiations.

Data from the Office of the U.S. Trade Representative show that bilateral trade between India and the United States reached approximately $129 billion in 2024, with U.S. exports to India amounting to $41.8 billion and imports totaling $87.4 billion, resulting in a trade deficit of $45.7 billion.

If these tariff measures are implemented, the Indian economy will face a heavy impact. Ajay Srivastava, a former Indian trade official, stated that the latest tariff hike will make India one of the most affected trade partners of the U.S., expecting India's exports to the U.S. to decrease by about 40% to 50%. Economist Madhavi Arola of Emkay Global Financial Services said, "At such an unbearable tariff rate, trade between the two countries will actually 'die'."

Industry experts also warned that sectors such as textiles, jewelry, and automobiles, which are labor-intensive, will suffer particularly greatly, putting small and medium enterprises in crisis, and lowering GDP growth projections by up to one percentage point. The market reacted quickly, with the rupee depreciating, the risk of imported inflation increasing, foreign portfolio investors withdrawing, and the cost of borrowing for foreign currency debtors rising.

According to Singh, these developments could also disrupt India's domestic politics. Modi has long relied on exaggerating his diplomatic achievements and his "personal relationship" with foreign leaders like Trump to shape a strong leader image, but now faces fierce domestic criticism. The opposition Congress Party has labeled him "Narendra Surrender" for yielding to Trump's pressure. Some important Hindu nationalist groups in India, who are supported by the U.S., also feel abandoned due to Trump's attacks on India.

Modi's BJP lost its majority in parliament in the last election, and the current dispute with the U.S. has again sparked doubts about his economic management and foreign policy. Singh believes that Modi's weakness in dealing with China, combined with Trump's rejection of him, could become his new political liability. The outside world now sees this as the lowest point in Modi's U.S. diplomacy since 2005, when he was denied a visa by the U.S. due to Muslim killings in Gujarat.

Facing the cold shoulder from the U.S., Modi has started emphasizing "strategic autonomy" again. On August 7th, India's National Security Advisor Dovar expressed "great happiness" upon learning that Russian President Putin plans to visit India by the end of the year. On the 31st, Modi will also travel to China to attend the Shanghai Cooperation Organization Tianjin Summit, which is his first visit to China since 2018.

The Chatham House think tank analyzed on the 12th that although these two visits were planned before the recent U.S.-India tensions, they demonstrate India's diversified and independent foreign policy. It is clear that India aims to position itself as a "non-Western but not anti-Western" power, aligning with China and Russia under pressure from the Trump administration while engaging in free trade negotiations with Western countries like the UK, and communicating with Ukrainian President Zelenskyy to maintain good relations with the West.

The think tank predicts that next, the U.S.-India relationship will depend on Alaska. Trump and Putin will meet on the 15th, and if a Ukraine-Russia ceasefire is indeed finalized, it might ease the secondary tariff pressure on India. Additionally, the sixth round of tariff negotiations between the two countries, scheduled for the end of the month, could also alleviate the tension between the U.S. and India.

The analysis states that overall, despite the tension in bilateral relations, the U.S. needs India to counter China, while India still views the U.S. as a key partner for technology, defense, and energy cooperation. In this context, India will continue to prioritize its relationship with the U.S. while building closer ties with countries like China and Russia.

"Trump has torn up India's original strategic roadmap, which may be replaced by strategic drift, realignment of alliances, or ultimately reconciliation," Singh said. But as the Rolling Stones song played at the stadium during Modi's grand rally for Trump in 2020, it goes, "You can't always get what you want." As proven, facing Trump, Modi couldn't get what he wanted, nor what India truly needed.

This article is an exclusive publication by Observer Net. Reproduction without permission is prohibited.

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