Trump tariffs: The instinct to view the Trump administration’s sudden imposition of 25 per cent tariffs on Indian goods as a mere negotiating tactic is understandable. The hope is that diplomacy might eventually guide both sides back to a mutually beneficial compromise. But such optimism misjudges the structural shift in how American economic statecraft functions under Donald Trump. For Indian policymakers, the message is clear: they must prepare for a transactional, zero-sum mindset in Washington, not a search for win-win outcomes.
At the core of this misreading lies the assumption that all trade conflicts can be resolved through creative compromise. Yet Trump’s tariffs are not designed to balance interests — they are calibrated instruments to pressure India into ceding ground in sectors that the United States has long targeted: agriculture, dairy, digital markets, medical devices, and more. In Trump’s view, success is measured in starkly commercial terms — gains for American producers that can be showcased to domestic constituencies.
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The non-negotiable demands
Indeed, as one Indian media columnist rightly noted, the American list of demands is neither narrow nor negotiable. It stretches from better access for ethanol, dairy and alcoholic beverages to deeper reforms in India’s patent regime, digital trade and data flows. In exchange, what is offered is the mere suspension of tariffs Washington itself has imposed — or, at best, the possibility of a “limited deal” that still leaves larger structural inequities untouched. It is difficult to see how this is anything but a zero‑sum proposition: for the US to claim a win it can tout to domestic lobbies, India must accept permanent market openings or regulatory changes that cannot easily be reversed.
The optimism that “there is no easy way out” yet diplomacy will eventually deliver a negative‑sum retreat for both sides underestimates the political logic of the Trump administration’s playbook. Tariffs are deployed precisely because they create pain asymmetrically, and because Washington judges that counterparties will blink first to avoid short‑term costs. It is not a tactic in search of mutual accommodation; it is a strategy designed to extract unilateral concessions.
Geopolitics in the shadow of trade
The larger context is critical. Trump’s economic nationalism sees trade not as a cooperative exercise but as a scoreboard: American surpluses good, deficits bad, and allies’ market protections as evidence of disloyalty. In this worldview, even India — formally labelled a “major defence partner” and courted as a counterweight to China — becomes fair game when domestic electoral arithmetic demands an adversary. The tariffs are not an aberration to be negotiated away; they are a feature of a foreign policy that conflates friends with clients.
These tariffs also carry a geopolitical message: that even trusted partners are expendable if they do not align fully with American strategic preferences — whether on energy ties with Russia or on digital sovereignty. The penalties linked to India’s defence and energy transactions with Moscow reveal a deeper aim: to constrain India’s traditional multi‑aligned posture and test how far New Delhi will bend its independent foreign policy.
A squeeze, but not a surrender
Some analysts have observed that India today appears squeezed by the Chimerica duo — pressured by Washington’s tariff salvos on one flank and Beijing’s assertive posture on the other — leaving it at its weakest strategic point in years. Yet while this diagnosis captures the intensity of external headwinds, it risks overlooking the quiet resilience that stems from India’s economic diversification, its growing convergence with a wider arc of middle powers, and its own whispers that it must do more to remain globally consequential. The squeeze is real; but whether it catalyses internal reform and fresh strategic clarity depends less on outside coercion than on India’s own choices in the months ahead.
While it is likely the United States would privately prefer groupings like BRICS to crumble or splinter, India is not expected to withdraw from any multilateral platform under external pressure. New Delhi’s strategic culture has long been marked by restraint and a deliberate refusal to yield to blunt‑force diplomacy — a stance some cynics mistake for timidity, but which in truth reflects hard‑earned maturity. Should the current downward spiral in US‑India trade and diplomatic ties persist, what we may instead see is greater Indian enthusiasm for frameworks like the Quad and deeper Indo‑Pacific cooperation — not as a pivot away from multipolarity, but as a rebalancing grounded in sovereign choice rather than coerced alignment.
Trump tariffs: The legacy calculus
It is also impossible to separate this from Trump’s personal ambition to craft a legacy moment. From earlier talk of mediating the India‑Pakistan conflict to recent hints at brokering energy deals in South Asia, there is a consistent pattern: a president keen to be remembered not merely as a disruptor but as a deal‑maker whose bold tactics reshaped geopolitics — and perhaps even earned him accolades like the Nobel Peace Prize. Tariffs, in this reading, become a means to force movement toward grand bargains — though always on American terms and at others’ expense.
Equally striking is the recent broadside from Trump himself, who lashed out at India and Russia for their close ties, declaring the two could “take their dead economies down together”. The irony is stark: a nation wrestling with stubbornly low growth, record fiscal deficits and polarised domestic politics presuming to lecture a country whose economic momentum has lifted millions from poverty and still holds promise of demographic‑driven expansion. It is a reminder that American exceptionalism often blinds its political class to the real shifts in global economic gravity — and why India’s policy calculus must remain anchored in quiet confidence rather than defensive concession.
A mercantile reset
India’s response must not stop at defensive manoeuvres alone. The deeper opportunity lies in reviving a mercantile instinct rooted in its own history — viewing trade not merely as import consumption but as a lever to build manufacturing depth, technological capability and export competitiveness. This demands urgency in scaling industry, forging fresh partnerships and strengthening value chains so India does not drift into the comfort of being merely a vast consumption market for foreign brands to trample upon. Nor is this a rant against global capital or brands; rather, it is a reminder that true economic sovereignty is achieved when domestic enterprise can hold its own on global terms, shaping flows of goods, data and ideas rather than simply absorbing them.
It is worth recalling, too, that while Trump’s tariffs undoubtedly sting, they do not pose an existential threat to India’s economic arc. Exports to the United States account for roughly two per cent of India’s GDP, and nearly 89 per cent of our outbound trade already flows to non‑US markets. This is not to dismiss the disruption or the livelihoods at stake, but to place them in sober perspective: the Indian economy remains broad‑based, with deepening ties across Asia, Europe, Africa and beyond. Recognising this reality should embolden policymakers to negotiate from quiet confidence rather than haste — to see tariffs not as a doomsday trigger but as an unwelcome test of resilience best answered by diversification, reform and strategic patience.
As a rising power deeply embedded in global supply chains and strategic partnerships, New Delhi must remain at the negotiating table — but with clarity that engagement does not require surrender, and compromise must never come at the cost of sovereign priorities.
This moment, then, is less about whether India can endure an asymmetric trade offensive, and more about what it learns from it. Endurance alone is insufficient; what matters is whether India emerges from this episode with a deeper mercantile instinct, a harder strategic edge, and an unambiguous resolve to shape global trade rules. Engagement must remain active, but concessions must never come at the cost of sovereignty.