The Trump administration has delivered its sharpest trade blow yet. Beginning on the 27th of August, Indian exports to the United States are facing 50% tariffs. The trigger is India’s refusal to curtail imports of discounted Russian crude, despite months of pressure from Washington. For New Delhi, the choice has been clear: energy security and economic sovereignty cannot be traded for temporary trade relief.
The tariffs strike at the heart of India’s export economy. Sectors like, Textiles, gems and jewellery, auto parts, pharmaceuticals, electronics, and seafood are being targeted. These industries employ millions and are deeply linked to India’s global trade profile. Yet the government has chosen to respond not with accommodation but with defiance.
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Prime Minister Narendra Modi set the tone in Ahmedabad earlier this week, declaring that “no matter how much pressure comes, we will keep increasing our strength to withstand it. Your interests are paramount for Modi.” The message was unmistakable: India will not bow.
Officials have described the tariffs as “unfair, unjustified, and unreasonable,” underscoring that farmers, small businesses, and sovereignty remain non-negotiable. Russian oil, which helps keep diesel and fertiliser costs low, will continue to flow into India as a vital shield for agriculture and inflation control.
This response stands in stark contrast to Europe’s. When faced with similar tariff threats, EU leaders initially spoke of retaliation but quietly backed down, shelving measures and opting for compromise. European commentators themselves have admitted this amounted to capitulation. India, by refusing to bend, is drawing a line between submission and sovereignty.
It should also be noted that, Washington’s diplomatic signals deserve scrutiny. Trump’s nominee for Ambassador to India, Sergio Gor, in his note of thanks on social media, lauded the former President’s “trust and confidence” but conspicuously avoided any mention of deepening U.S.-India ties.
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Former diplomats such as Kanwal Sibal have pointed out how unusual this is, a new ambassador normally begins by affirming commitment to bilateral partnership. Instead, Gor’s emphasis was squarely on loyalty to Trump and his “Make America Great Again” project, with silence on issues that matter most to India, from cross-border terrorism to economic cooperation.
The risk is that his additional role as Special Envoy for South and Central Asia could revive contentious themes like Kashmir while leaving India’s security concerns unaddressed. Other senior U.S. officials have applauded the appointment only at a personal level, offering congratulations without acknowledging its importance for bilateral ties.
Except for Secretary of State Marco Rubio and Pentagon Undersecretary Colby, few have even referenced India in their remarks. The Senate confirmation hearings will force Gor to say positive things about the relationship, but the nuances will matter. For New Delhi, this nomination arriving alongside punitive tariffs reinforces the sense that Washington is approaching India with pressure rather than partnership.
What are the tariffs really about?
To understand the latest round of tariffs, it is important to revisit Trump’s long-standing complaints. He has often called India the “tariff king,” citing high barriers on agriculture, dairy, and consumer products. His argument rests on reciprocity: U.S. products like Harley-Davidson motorcycles or American dairy face steep tariffs in India, while Indian exporters enjoy easier access to the American market.
The tariffs therefore serve multiple objectives. They protect American farmers and small manufacturers by limiting foreign competition. They double up as a campaign talking point, allowing Trump to position himself as defending American jobs. And strategically, they create leverage over countries like India and China, signalling that trade openness must be mutual.
India’s tariff profile is among the highest in the G20, particularly in agriculture and consumer goods. This protectionist stance stands out in South Asia, where several economies have adopted more liberal trade policies.
| Country | Average Tariff Rates (approx.) | Trade Stance / Notable Features |
| India | ~17% overall; much higher on agriculture/dairy | Protectionist, high duties on farm goods and consumer products |
| Pakistan | ~10–11% | Relatively lower, more liberal stance on imports |
| China | ~7–8% | Selectively high tariffs in sensitive sectors, but lower weighted average |
| Bangladesh | ~9% | Lower duties on manufactured imports, export-oriented strategy |
| Nepal | ~10% | Openness on manufactured imports, reliance on Indian market |
| Sri Lanka | ~8–9% | Generally liberal, focused on facilitating global trade |
This comparison highlights why India continues to be in Washington’s crosshairs. Trump’s line of attack, that India maintains among the highest barriers while seeking market access abroad finds statistical backing.
Sectors most affected by the Trump Tariffs
The U.S. has long been a top destination for India’s textiles, gems and jewellery, pharmaceuticals, IT-enabled services, and seafood. Tariffs will directly squeeze exporters in Surat’s diamond industry, Tiruppur’s textile hubs, and coastal seafood exporters. For pharmaceuticals too, the U.S. is by far the largest market, accounting for more than a third of India’s drug exports.
Diversification is therefore critical. Indian exporters are already eyeing the Middle East, Africa, and ASEAN as alternative destinations. Europe, despite its own trade frictions, remains a high-value market for pharma and textiles.
Africa’s growing middle class offers demand for affordable Indian consumer goods. ASEAN and East Asia can absorb more electronics and auto components. The government’s trade diplomacy is pushing new agreements with the UAE, Australia, and the EU moves designed to reduce over-reliance on the U.S. market.
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At the same time, sector-specific strategies are emerging. The textile industry is lobbying for faster FTAs with the UK and EU to offset American losses. Pharma exporters are seeking regulatory harmonisation in Africa and Latin America. Jewellery and gems are shifting marketing focus to the Gulf and East Asia, where demand for luxury goods is rising. The seafood sector is turning to Japan and South Korea, both of which value Indian suppliers’ competitive pricing.
These shifts are not overnight fixes, but they underline India’s broader aim: build resilience through market diversification rather than remain hostage to a single destination’s political whims.
The politics behind India’s stance
Beneath the politics lies a careful calculation. Farmers stand protected because stable diesel and fertiliser prices keep agricultural costs under control. Export-oriented small businesses in textiles and gems, while exposed to short-term disruptions, are being cushioned through relief packages and credit support. Trade outreach is actively expanding into the Middle East, Africa, and ASEAN to diversify away from the American market.
For workers and job seekers, the Make in India push and new manufacturing hubs are designed to absorb shocks, while skill programmes help shift employment into resilient industries. Consumers too are insulated because Russian oil keeps fuel prices steady, which in turn holds down food and transport costs. Even exporters and industrialists, though facing pain in the US market, are being offered incentives and lobbying support aimed at making them more competitive in the long run.
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At its core, the Modi government’s stand is about asserting independence. By prioritising the livelihoods of farmers, the survival of traders, and the stability of consumers over American pressure, it has chosen resilience over submission. The government is betting that short-term sacrifice will translate into long-term strength.
The average citizen may never parse the complexities of tariff policy, but its consequences will be felt in everyday life at the petrol pump, in the mandi, and at the kirana shop. If those spaces remain shielded from global shocks, the government’s gamble pays off not just politically but economically.
India’s refusal to bend is not without cost, but it is also not without purpose. In a world where even advanced economies have folded under American pressure, New Delhi is sending a clear message: sovereignty is not up for negotiation. The tariffs may hurt, but they also mark a turning point in India’s economic journey.
The sharper the pressure, the firmer India’s spine grows.
About the author: Pulkit Singh Bisht is an advocate and socio-political commentator. He tweets under the username @thepulkitisbisht.
Note: The opinions in the article are those of the author alone and do not reflect the Editorial Line of ForPol.
