A Friendship turned into a Tariff fight

Back in 2024 in the U.S. during the election, Trump criticized India on U.S. goods—such as motorcycles and medical devices with duties up to 60%—and threatened reciprocal measures. In February 2025, PM Modi visited Washington, where both countries agreed to meet their goal of $500 billion in bilateral trade by the end of the year 2030. In response to this, PM Modi even said that they are ready to lower the tariffs that they put on the US for goods, though the pricing and products were not decided yet. And during the first administration of Trump, the US imposed heavy taxes of around 25% on Indian steel and aluminum to protect national security, but it was not appreciated by India, so it delayed the response.

In the present, President Trump announced new tariffs on India with a 26 and 27% increase on products that are entering India. He felt that the Indian tariffs were high as compared to the US, which were 11.5% to 12% in India, and the US had only 2.2%, which was an unfair deal to be continued. But as India is listed as a developing country, it has the right to impose higher tariffs and to protect domestic industries, but in return, it has gained a position as the 4th largest economy in the world, so should it enjoy all these benefits and rights? as India is struggling with issues like low per capita income, a large rural population, and the need to protect small businesses and farmers So, it uses higher tariffs as a tool to protect local jobs and industries from being crushed by cheaper goods from rich countries.

But apart from all this, the higher tariffs cost India a risk, as 87% of India's exports to the US, such as medicines, textiles, gems, and car parts, are at risk. But for standing up, the US gave time to India for about 3 months till the 9th of July to solve and respond to the matter diplomatically. India, in response, did try to solve the matter with peace; it said that both should reduce the cost of tariffs to maintain good ties. Many experts and officials suggested that India should expand their ties with other countries as well.

On 30 of July 2025, Trump announced a permanent and fixed tariff of 25% on India, and it went into effect on the 1st of August 2025. and it also threatened further penalties, but India did a bold move in response and purchased Russian oil. But the new tariffs that are imposed on India have caused the price hike in Indian goods selling in US markets. India's economy is facing a huge backdrop as the tariffs imposed by the US have increased directly by 20.4%, and the stock market dropped after this news got released. Export sectors like textiles, electronics, jewelry, and chemicals started feeling the pressure. India launched a ₹20,000 crore plan to help Indian exporters deal with the hit.

A U.S. court case—V.O.S. Selections et al. v. United States (May 28, 2025)—ruled that President Trump’s unilateral tariff orders under IEEPA exceeded executive authority. The case was appealed, with a stay in effect pending the hearing in July 2025.
In response to rising concerns, U.S. Congress introduced the Trade Review Act of 2025 (S.1272)—proposing a legal check on executive tariff power, requiring notification and approval by Congress.

In the days following the tariff hike, both nations resumed diplomatic talks in hopes of finalizing a limited trade deal by September. It is also said that if by September the issue is not resolved, there would be a drop in fiscal year 2026 by more than 5%. Meanwhile, the Indian government is planning a ₹20,000 crore export support scheme to cushion exporters from losses. With pressure mounting, the next two months are critical for resolving the deadlock and shaping the future of India–U.S. trade relations.

And in the present update of 6th August US imposed 25% extra tariff that is total 50% tariff hike for India. This tariff will be implemented overnight, and it will be implemented within 21 days. White House released the statement saying Russian Federation is Fuling the fund in its aggression and India is reselling oil in the open market, this marks that US wants to be superior and dominant over India and when they refused to accept this, they started levying heavy tariffs. There has been official news that PM Modi is visiting China, that has never happened in these 7 years.

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