The United States of America (USA) has implemented an additional 25% customs duty on India as of August 27, 2025.[i]The reason given for this was New Delhi’s continued oil purchases from Moscow. Thus, the total customs duty imposed on India has risen to 50%.[ii] Before assessing this development, it is worth mentioning the emergence of eco-political tensions between India and the US and how they progressed.
Looking at bilateral relations during Joe Biden’s term, India managed to avoid sanctions under the “Countering America’s Adversaries Through Sanctions Act (CAATSA)” despite purchasing S-400 air defense systems from Russia. Meanwhile, India, which strengthened its military partnership with the US during this period, also managed to maintain its economic ties with Russia without triggering any crisis. The New Delhi administration, which did not want to be subject to Western sanctions, acted cautiously while developing its trade relations with Moscow and took care to constantly consult with the West on this issue. Nevertheless, India, pursuing a strategy of maintaining its strategic autonomy in foreign policy and increasing localization in the defense industry, has made efforts to remain unaffected by the West in its relations with Russia.
In 2025, with Donald Trump’s election as president of the United States, New Delhi, like many other countries, entered a more challenging period in managing its relations with Washington. Following Trump’s second term in office, his desire to position himself as an actor in ending wars, preventing conflicts, and building peace has been particularly noteworthy. In this regard, in May 2025, the US, among other actors, made some diplomatic efforts to defuse the conflict between India and Pakistan over Kashmir. Regarding these efforts, Trump emphasized that he had “prevented a possible nuclear war between Pakistan and India”[iii] and referred to this as a “diplomatic success.”
From India’s perspective, it can be concluded that great importance is attached to strategic autonomy in managing relations with Pakistan and China. Therefore, the New Delhi administration is committed to pursuing a completely autonomous foreign policy in determining its relations with Beijing or Islamabad. For this reason, the US tendency to exert diplomatic pressure on India regarding the management of its relations with both Pakistan and China has always been a matter of concern for the New Delhi administration.
In addition to political tensions, economic tensions with the US have also continued to escalate. The Modi administration’s nationalist-protectionist economic approach, which aims to increase domestic production and consumption, has been viewed as a threat by the Trump administration, which pursues mercantilist policies, and has become a significant factor in the increase in tariffs. In particular, the Trump administration is acting on the belief that the Modi administration should “pay more” to the US, taking into account the “contributions” it made to India in calming the recent clashes with Pakistan. India’s protectionist economic policies, which focus on domestic production, as well as its continued trade with Russia in the energy sector, can be said to have been key factors in the Trump administration’s decision to impose an additional 25% tariff on India. Moreover, New Delhi’s failure to sufficiently heed Washington’s warnings while managing its trade relations with Beijing can be considered as another factor.
According to reports in Western media, Modi has rejected both Trump’s invitation to Washington and requests for phone calls regarding customs tariffs.[iv] This stance signifies the strong defense of India’s foreign policy line defined around national interests, not allowing third parties to intervene, and in this sense, not allowing Trump to turn these issues into a means of pressure and use them. On a more reasonable interpretation, India opposes the transformation of national issues such as foreign policy and economy into objects of conflict and competition in world politics. India, which wants to emphasize that it pursues an autonomous policy towards actors such as Pakistan, China, and Russia, also desires to advance its relations with the West. However, the failure of the US under Trump’s leadership to manage its relations with India could create a security vacuum in different regions, particularly in the Indo-Pacific and South Asia. If the eco-political tensions between India and the US continue, cracks are likely to appear in regional partnerships, including cooperation on transport corridors in Asia.
If India-US relations become trapped in economic and trade disputes, this could have negative consequences for regional and global geopolitics. First and foremost, the US needs India’s support in its struggle with China. In this respect, India is one of the key actors in the US strategy to contain China. Furthermore, in terms of Western-Russia relations, India is positioned as an important balancing actor. However, since the Trump administration views India’s position from a more self-serving perspective, it seems inevitable that problems in the relationship will grow.
The Trump administration’s new tariffs have begun to cause problems in the US’s relations with many of its allies around the world. These include Japan and South Korea from the Asia-Pacific region. The Trump administration believes its allies should “pay more.” Therefore, the new tariffs serve as a means to bring the US back to the negotiating table with its allies on customs duties. Hence, the recent tension between the US and India over “tariffs” is not very different from the scenarios faced by allies such as Japan and South Korea. The biggest difference is that India’s relations with Pakistan and China are much more fragile, and the possibility of a military confrontation in the region remains high.
[i] “Narendra Modi rejects Donald Trump calls four times as India-US tariff war explodes”, Express, https://www.express.co.uk/news/world/2100455/narendra-modi-rejects-donald-trump-india, (Date of Access: 27.08.2025).
[ii] Ibid.
[iii] “PM Modi avoided four Donald Trump calls, says German media, as US-India ties sour”, Times of India, https://timesofindia.indiatimes.com/india/pm-modi-avoided-four-donald-trump-calls-says-german-media-as-us-india-ties-sour/articleshow/123529092.cms, (Date of Access: 27.08.2025).
[iv] Ibid.
