Trump 2.0 and India: Record Tariffs, Pakistan Tilt, and the Future of US–India Relations

For over two decades, India and the United States have been building what many called a “natural alliance.” From nuclear cooperation to defense partnerships, from space exploration to joint technology ventures, the relationship seemed to be on a steady upward curve. But in the first year of Donald Trump’s second term, the mood has changed sharply. What was once seen as a steadily deepening friendship now feels like a relationship under strain — perhaps even at a crossroads.

Two recent developments have shaken New Delhi’s confidence. The first is an unprecedented tariff hike that directly targets Indian exports. The second is a sudden warming of US–Pakistan ties, accompanied by provocative remarks from Pakistan’s military leadership made on American soil. Together, these moves have raised serious questions about how India should navigate its ties with Washington in this new, more unpredictable era.

The Day the Tariff Bomb Dropped

On August 6, 2025, President Trump announced an additional 25% tax on most Indian goods sold in the United States. This came on top of an earlier 25% tariff, bringing the total to a staggering 50% — the highest America has ever imposed on any trading partner. For Indian exporters, it was a gut punch that could not be ignored.

Trump justified the move by accusing India of buying too much discounted crude oil from Russia, arguing that this indirectly fuels Moscow’s war in Ukraine. While critical sectors like pharmaceuticals and semiconductors were spared to avoid disrupting US healthcare and tech supply chains, many of India’s key export categories — textiles, jewelry, auto parts, chemicals — were hit hard. Trade analysts estimate that more than half of India’s $87 billion annual exports to the US could now be at risk of losing competitiveness in the American market.

“Why Us?” — The Fairness Question

What has frustrated Indian policymakers the most is the sense of double standards. The United States and several European countries continue to import Russian commodities such as uranium, LNG, and fertilizers through exemptions and loopholes. Yet India is being singled out for punishment. New Delhi’s argument is straightforward: buying Russian oil is not about political alignment — it is about keeping energy affordable for 1.4 billion people, especially after Middle Eastern suppliers redirected much of their oil to Europe.

“Friends should be able to talk things through — not settle disagreements through public punishment,” remarked one senior Indian official off the record.

When a Partner Turns into a Competitor

This episode is about more than just trade figures. It sends a clear signal that even long-standing partners can be treated like competitors if their actions are seen as conflicting with Washington’s strategic priorities. For India’s export-driven sectors, the consequences could be significant: fewer orders from the US, reduced revenues, and potential job losses in industries that employ millions, from diamond cutters in Surat to textile workers in Tiruppur.

While We Get Tariffs, Pakistan Gets a Red Carpet

As India faces economic headwinds from the tariffs, Pakistan has been receiving an unexpected boost in its relationship with Washington. The US has kept tariffs on Pakistani goods at around 19%, encouraged new investments in Pakistan’s energy and mineral sectors, and rolled out high-profile diplomatic hospitality — including a rare White House luncheon for Pakistan’s army chief, Field Marshal Asim Munir.

Munir’s visit made headlines for another reason: from US soil, he issued aggressive nuclear threats, not only towards India but towards “half the world” if Pakistan were ever under existential threat. New Delhi condemned these remarks as reckless and provocative. What alarmed Indian observers even more was the US government’s lack of a strong public response.

Why the US is Warming to Pakistan Again

The reasons are partly strategic. Pakistan still holds value for the US in areas like counterterrorism cooperation and its geographic position near Afghanistan. Moreover, Washington appears to be taking a more “de-hyphenated” approach to South Asia — engaging with India and Pakistan on separate, transactional terms rather than through a single strategic lens. This flexibility may benefit short-term US interests, but it risks unsettling the delicate regional balance.

What This Means for the Common Indian

These developments are not just abstract diplomatic maneuvers — they have real-world consequences for ordinary Indians:

• Jobs at risk: Reduced demand from US buyers could hit export-oriented industries, leading to job losses in textiles, jewelry, and auto components.
• Price pressures: Companies facing reduced export income may increase prices domestically to make up the shortfall.
• Security concerns: A more confident Pakistan, buoyed by closer US ties, could take a harder line on border and regional issues.
• Reduced influence: India’s voice in Washington on sensitive topics like Kashmir or Indo-Pacific security may carry less weight during this phase.

India’s Options: Playing the Long Game

India has weathered diplomatic storms before, and the path forward requires a mix of firmness, flexibility, and strategic planning:

• Diversify export markets: Increase trade with Europe, the Middle East, Africa, and Southeast Asia to reduce dependency on the US market.
• Defend energy choices: Continue explaining why diversified energy sourcing — including Russian oil — is essential for price stability and energy security.
• Broaden partnerships: Deepen ties with nations like Japan, France, Australia, and the UAE to build a stronger network of reliable partners.
• Keep talking to Washington: Maintain regular dialogue to ensure disagreements don’t turn into long-term mistrust.

Not the End, But a Wake-Up Call

This is not the collapse of US–India relations. The two countries still share many converging interests — from keeping the Indo-Pacific region stable to collaborating on advanced technologies and space exploration. But the recent tensions are a reminder that in international politics, partnerships are always subject to change.

Bottom line: India should keep the US close, but not at the expense of its own strategic independence. Building resilience, diversifying partnerships, and preparing for sudden policy shifts are no longer optional — they are essential for navigating the unpredictable currents of global politics.