New Delhi – The United States’ recent tariff hike on Indian exports, following New Delhi’s continued purchase of Russian oil, has reignited tensions between the two nations, a new report warns.
The report, titled “How to Lose an Ally Over 50% Tariffs” by One World Outlook, cautions that Washington’s approach may drive a wedge between the US and India — a strategic partner it can ill afford to alienate.
“For over two decades, the US has seen India as a natural counterbalance to China. But a series of strategic missteps — marked by economic nationalism, coercive diplomacy, and double standards — now threaten that vision,” the report states.
US policymakers, across administrations from George W. Bush to Joe Biden, have viewed India as central to securing a “free and open Indo-Pacific.” This vision has materialized through defence collaborations, tech partnerships, joint naval drills, and frameworks such as the Quad, as well as more recent initiatives like TRUST and COMPACT.
In 2024, the US and India signed a 10-year defence roadmap and launched plans for joint innovation and supply chain integration, aiming to boost bilateral trade to $500 billion. India’s expanding market, tech ecosystem, and military modernization have been seen as essential for countering China’s growing regional influence.
However, the report highlights that the relationship, while strong on paper, continues to falter in practice — largely due to three recurring issues: India’s insistence on strategic autonomy, America’s perceived double standards, and growing economic nationalism on both sides.
India’s decision to maintain oil imports from Russia, despite Western pressure, is not merely a policy disagreement, the report argues, but a reflection of deeper fault lines.
Since its independence, India has pursued a multipolar foreign policy — balancing defence ties with Russia, trade with China, and strategic cooperation with the US — while refusing to align completely with any global bloc. This independent stance, the report notes, is now clashing with US attempts to pressure India through punitive measures.
“By imposing tariffs in response to India’s oil trade with Russia, the US underestimates New Delhi’s resolve to uphold its sovereignty,” the report warns. “Such coercive tactics breed mistrust, not alignment.”
The report is especially critical of what it calls the “glaring hypocrisy” of the Trump administration, which chose to raise tariffs on Indian goods while pausing tariffs on Chinese imports — even as China continues to purchase oil from both Russia and Iran.
Observers in India and beyond, the report notes, are interpreting this as a clear double standard — a willingness to accommodate adversaries when convenient, while penalizing allies when it suits American interests.
Additionally, both India and the US have turned inward economically in recent years. India’s Atmanirbhar Bharat (self-reliant India) campaign and Trump’s Make America Great Again agenda reflect a shared push toward domestic self-sufficiency. “But problems arise when nationalistic policies of two partners collide,” the report adds.
Trump’s tariff hikes, targeting Indian exports such as pharmaceuticals, textiles, and auto parts, could hurt not only Indian industries but also American consumers and businesses that rely on low-cost imports. In retaliation, India could restrict US access to its booming tech sector, slow defence deals, or seek alternate global partners.
Beyond bilateral ties, the report suggests these actions could have far-reaching global consequences. India is increasingly seen as a key voice for the Global South and a bridge between developed and developing nations. Its leadership roles in forums such as the G20, BRICS, and the International Solar Alliance amplify its global influence.
“If the US weakens its relationship with India, it also undermines its own standing in the Global South,” the report concludes. “Its credibility in regions like Southeast Asia, Africa, and Latin America — already fragile — could further deteriorate if India begins to distance itself.”
With inputs from IANS