When Indian Prime Minister Narendra Modi visited the United States shortly after Donald Trump assumed the presidency, the discussions were warm, marked by friendly gestures and promises of expanding trade. Yet, within six months, the scene had changed dramatically. On August 27, 2025, the Trump administration imposed 50% tariffs on most Indian exports to the United States — among the highest in the world.
Trade negotiations between Washington and New Delhi failed to produce results, and matters worsened when Trump announced an additional 25% tariff on India’s purchases of Russian oil. India’s response was swift: New Delhi suspended several strategic arms deals with the United States, including the purchase of Stryker combat vehicles, Javelin anti-tank missiles, and six P-8I reconnaissance aircraft, a contract worth $3.6 billion. Prospects for India’s acquisition of F-35 fighter jets also evaporated.
Consequently, India has been moving closer to Russia and China, intensifying its military cooperation with Moscow. According to India’s First Post, National Security Advisor Ajit Doval flew to Moscow immediately after the U.S. sanctions to discuss expanding the S-400 air defense systems and possibly negotiating over Su-57 stealth fighters.
Rapid Deterioration of Relations and Closer Ties with Russia and China
In a nationally televised speech, Modi declared that India “will never compromise on the interests of its farmers, herders, and fishermen.” His words, clearly directed against Trump’s calls for liberalizing India’s agricultural market, received unprecedented support from the opposition. Rahul Gandhi described the American tariffs as “economic blackmail” and “an attempt to coerce India into an unfair trade deal.”
Just days after Trump’s announcement, Modi held a phone call with Russian President Vladimir Putin, emphasizing India’s willingness to strengthen ties with Moscow. Modi later wrote on X that the conversation had been “very good and detailed,” and announced he would host Putin in India later this year. Meanwhile, a planned visit by the U.S. Defense Secretary was quietly canceled.
At the same time, Modi began seeking to end six years of stalemate in India’s relations with China. Observers noted that the timing — amid the worst crisis in U.S.–India relations in decades — was a direct response to Washington’s efforts to pressure India into a subordinate role.
China’s Global Times, the English-language outlet of the Communist Party, published a detailed article on the revival of trilateral cooperation between Russia, India, and China (RIC), describing it as a platform for discussing major global and regional issues. Chinese scholars, including Xie Zhao of Fudan University, emphasized the “special significance” of a new beginning for the three nations, all of which were facing “unilateral pressure from the United States.”
Collectively, the economic power of Russia, India, and China stands at nearly $25 trillion, roughly equal to that of the United States — and possibly greater in terms of purchasing power parity. Together, they command vast landmasses, natural and human resources, and formidable nuclear arsenals. Several signs have emerged of a thaw between Beijing and New Delhi, including ministerial visits, the resumption of tourist visas, and plans for direct flights.
Strains on the Western Quad Alliance
As India strengthens its eastern alliances, the Quad alliance (United States, India, Japan, and Australia) has come under strain. According to the South China Morning Post, Trump’s planned visit to India this fall for the Quad summit is now uncertain, given the lack of progress in trade talks and the absence of “substantive outcomes.” Western media have warned of the potential unraveling of the Quad, as Australia and Japan may be forced to choose between loyalty to Washington and preserving the group’s unity.
Former U.S. National Security Advisor John Bolton cautioned that Trump’s tariff policy toward India could lead to “the worst possible outcome” for the United States — pushing New Delhi closer to Moscow and Beijing. As The Indian Express noted, “Trump’s leniency toward China and his harsh tariffs on India” threaten decades of U.S. efforts to draw India away from Russian and Chinese influence.
From India’s perspective, Washington is exaggerating the impact of Indian tariffs on U.S. products and overstating the importance of India’s continued imports of Russian oil. While India has indeed increased its oil purchases from Russia in recent years, Indian officials argue that China’s imports are far greater, and that the European Union still depends heavily on Russian energy.
Moreover, even the United States continues limited trade with Russia, particularly in nuclear materials and other essential products. Yet Trump insists that it is India’s oil purchases alone that sustain Moscow’s war in Ukraine.
New Delhi views Trump’s remarks — suggesting that India could receive a 25% tariff reduction if it stops buying Russian oil — as an act of arrogance and misplaced superiority. India, officials say, intends to send a clear message that its economy does not depend on the United States, and that its sovereignty is not negotiable.
Personal Grievances and Strategic Miscalculations
It is also widely believed that Trump resents the Modi government for refusing to acknowledge his claimed mediation in resolving the India–Pakistan conflict, and for not nominating him for the Nobel Peace Prize, unlike Israel and a few other countries that did so to curry favor with him.
Trump’s decision to impose steep tariffs was aimed at pressuring New Delhi to align with U.S. interests, particularly regarding Ukraine. Yet the move backfired spectacularly. Instead of bowing to pressure, India reaffirmed its strategic autonomy. Finance Minister Nirmala Sitharaman publicly declared that India would continue buying Russian oil.
Economic Losses on Both Sides
In 2024, U.S. exports to India totaled $42 billion, less than half the value of Indian exports to the United States. While India bears a larger economic cost, analysts stress that America will pay a heavy price as well. One expected consequence is a sharp decline in Indian students enrolling at U.S. universities — a major source of revenue for American institutions.
Another casualty may be the U.S. plan to relocate manufacturing industries from China to India — now at risk due to the tariff war. In purely economic terms, hurting India serves no American interest.
Speaking to reporters on September 6, Trump reaffirmed his “very special relationship” with India and described Modi as a “great Prime Minister” who “will always be my friend.” Yet he added pointedly, “I’ll always be a friend — but I simply don’t like what he’s doing right now.”
While Trump’s remarks signal a desire to stabilize relations, they do little to erase the deep tensions over trade, Russian oil, and diverging geopolitical priorities. The 50% tariffs remain in place, and threats of further sanctions linger if India does not end its oil imports from Russia. The long-awaited bilateral trade agreement is stalled.
Analysts say Trump’s softening tone reflects domestic political pressure rather than any newfound appreciation of India’s value. Mounting signs of economic slowdown, a weak job market, negative media coverage, and declining approval ratings are prompting Trump to repair ties with Modi.
The tariffs, initially intended to revive American manufacturing, have instead hurt industries dependent on global supply chains. Though retail prices initially remained stable due to pre-tariff inventories, they are now expected to rise, as importers can no longer absorb the costs.
Globally, Trump’s trade war is reshaping economic alliances, driving countries to seek alternative trading blocs. The U.S. dollar’s dominance continues to erode, particularly as BRICS nations increase trade in their local currencies — the yuan, ruble, and rupee among them.
Meanwhile, Narendra Modi remains one of the world’s most popular leaders, with approval ratings above 75%, according to Morning Consult. Analysts warn that Trump’s hostility risks alienating a key U.S. ally and the Indian-American community, a growing force in American politics.
America’s Unspoken Goal
While Washington frames its actions as retaliation for India’s Russian oil imports, many observers argue that the real motive is to resist the rise of a multipolar world. The U.S. appears determined not only to preserve its global dominance but to expand it.
India — now the world’s most populous country and an emerging economic and military power — represents a growing challenge to U.S. hegemony. Trump’s aggressive tariff policy may thus be an attempt to rein in India before it becomes too powerful, much as Washington failed to do with China decades ago.
At home, the U.S. is struggling to maintain its global leadership. The slogan “Make America Great Again” reflects this anxiety, as Washington views the ascent of China, India, and the BRICS nations as a direct threat to the post–World War II order.
Another concern for American policymakers is the income gap between Asian immigrants and native-born Americans. According to the U.S. Census Bureau, the median national household income is $89,050, compared to $151,200 for Indian-American households (Pew Research Center). This disparity stems largely from differences in education levels: 77% of Indian-Americans aged 25 and older hold a bachelor’s degree or higher. Many occupy top leadership positions at companies like Google, Microsoft, Novartis, Adobe, IBM, Chanel, Micron Technology, Palo Alto Networks, and Cadence — influence that the Trump administration reportedly views with unease.
Pakistan, China, and a Shifting Balance
While Trump penalizes India with tariffs, he has simultaneously intensified his outreach to Pakistan, India’s long-time rival. He hosted Pakistan’s army chief, General Asim Munir, for a private lunch at the White House and announced plans for expanded cooperation, including an oil deal.
This strategy may aim to strengthen Pakistan’s position as a counterweight to India — ironically mirroring China’s decades-old approach. Yet the emerging China–India rapprochement could upend such traditional alignments. Should New Delhi and Beijing deepen their understanding, Pakistan could find itself isolated between two major powers.
At the same time, Pakistan is deepening its cooperation with Iran, adding further complexity to the regional equation. Economically, however, Pakistan — whose economy is ten times smaller than India’s — lacks the weight to replace India in Washington’s strategic calculus. At most, it can serve as a pressure lever against New Delhi.
A New Strategic Reality: Can India and China Truly Cooperate?
For India, the current standoff with the United States also presents an opportunity to recalibrate its internal and external priorities, fostering a climate conducive to rapid growth and strategic diversification.
The Shanghai Cooperation Organization (SCO) summit held in China in August 2025 marked a turning point in India’s relations with both the U.S. and the broader West. Modi’s presence — his first visit to China in seven years — was widely interpreted as a clear signal to Washington.
The summit went far beyond regional cooperation. China used the platform to showcase what a post-American international order might look like, sending a message that Washington’s attempts to contain China, Iran, Russia — and now India — have failed.
Relations between China and India have improved since the bloody 2020 clashes along their disputed Himalayan border, where twenty Indian and forty-three Chinese soldiers were killed. In October 2024, the two countries signed an agreement to prevent future border incidents.
Despite lingering mistrust, India remains heavily dependent on China for 80% of its electronic components, 70% of its chemical raw materials, and 90% of its rare earth minerals. Analysts say that while cooperation is possible, overcoming deep strategic distrust will take time. Both nations still maintain 50,000–60,000 troops along their frontier.
Meanwhile, India’s potential purchase of Russia’s Su-57 fighter jets, ignoring Trump’s offer of F-35s, underscores the limits of using trade and tariffs as coercive tools. What might work against Europe, analysts say, fails with India.
The message from the SCO summit was unmistakable: the world is no longer centered around the United States. India, China, and Russia made it clear that global decisions will no longer be dictated from Washington. Contrary to Trump’s expectations, India’s economy did not collapse under U.S. tariffs; instead, New Delhi signaled its readiness to redirect trade elsewhere.
Discussions at the summit included plans to establish a new development bank under the SCO, positioned as a direct competitor to the IMF and World Bank. Chinese President Xi Jinping announced 2 billion yuan in grants ($280 million) and 10 billion yuan in loans ($1.4 billion) to member states.
Improving ties with China — a historic rival — marks a bold step by Modi’s government to challenge Trump’s approach. The summit also underscored the emergence of a Global South coalition, openly defying U.S. dominance. Russia revived the idea of the Russia–India–China “troika”, envisioned as a strategic counterweight to American hegemony after the Cold War.
While China welcomed the proposal, India has not yet committed. Nonetheless, the direction is clear: if Washington continues its coercive policies, India will move further away, not closer.
Europe’s Role and the Search for Balance
U.S. officials are increasingly worried that India might strengthen its ties with the European Union to offset losses from the tariff war. While Trump denounces India’s growing closeness with China and Russia, Europe has taken a different approach, seeking to deepen its partnership with New Delhi.
In a joint phone call, Modi, European Council President António Costa, and European Commission President Ursula von der Leyen welcomed progress on trade, technology, investment, innovation, sustainability, defense, and supply-chain resilience. Both sides reaffirmed their commitment to expediting negotiations for a Free Trade Agreement (FTA) and implementing the India–Middle East–Europe Economic Corridor (IMEEC).
Italian Prime Minister Giorgia Meloni has also pushed to accelerate the FTA talks, calling them vital for geopolitical balance. Europe’s broader strategy is to keep India aligned with the West, preventing its full tilt toward the Sino-Russian axis.
Analysts note that Modi’s policy of multi-alignment, rather than anti-Westernism, remains intact. As Meloni reportedly told her cabinet, Modi’s outreach to rivals of the Western system does not represent a strategic rupture but reflects India’s long-standing tradition of diversified partnerships.
India does not intend to abandon the “axis of democracies.” Instead, it seeks recognition of its central role in the wider strategy to contain China. On the sidelines of the SCO summit, Modi’s visit to Japan reaffirmed that the free and open Indo-Pacific remains the cornerstone of his vision — consistent with the late Shinzo Abe’s framework for the region.
Georgetown University scholar Charles Kupchan summarized India’s position succinctly: “India has not turned its back on the West; it’s simply playing its cards wisely.”
Amid Trump’s tariffs on key U.S. allies, both India and the EU see an opportunity to advance their own strategic and economic interests. Negotiators are pushing to finalize the FTA by year’s end, in time for the India–EU leaders’ summit early next year.
In 2023, EU–India trade in goods reached €124 billion, representing 12.2% of India’s total trade, while trade in services nearly doubled from €30.4 billion in 2020 to €59.7 billion in 2023.
Conclusions
- Trump’s tariff escalation, intended to punish India for its ties with Moscow, has instead driven New Delhi closer to Beijing — threatening U.S. interests in the Indo-Pacific, where India serves as a critical counterweight to China.
- Facing growing media skepticism over his diplomatic competence, Trump’s emphasis on a “special friendship” with Modi appears to be a calculated attempt to deflect criticism and project an image of control.
- The dispute has placed pressure on the Quad alliance (U.S., India, Japan, Australia), with talk of potential fragmentation. In contrast, India is strengthening ties within the Shanghai Cooperation Organization and pursuing a trade pact with the EU.
- India insists it will not yield to external pressure — whether over Russian oil or agricultural policy — underscoring its commitment to economic sovereignty and strategic multi-alignment.
- Although India may bear greater short-term economic costs, Washington risks losing a vital strategic ally in Asia. Trump’s policies could further isolate the United States and accelerate efforts by BRICS and the EU to build alternatives to the U.S.-dominated global order.
Sources:
- Telepolis, August 12, 2025
- Frankfurter Rundschau, August 31, 2025
- Times of India, September 3, 2025
- OpIndia, September 5, 2025
- Handelsblatt, September 8, 2025.
