India Stands Firm as U.S. Tariffs Threaten Economic Growth and Global Standing

India's ongoing trade negotiations with the United States continue amid the looming threat of additional U.S. tariffs on Indian exports. Indian Foreign Minister Subrahmanyam Jaishankar emphasized that New Delhi is prepared to defend its interests during the discussions, particularly those concerning the agricultural and dairy sectors. Bilateral trade between India and the U.S. reached $190 billion in 2025, making it a significant economic relationship between the world’s largest and fifth-largest economies [1].

The U.S. has imposed a 25% tariff on Indian goods, with an additional 25% set to take effect on August 27, 2025. These tariffs are among the highest levied by Washington and are a response to India’s increased purchases of Russian oil. The decision to impose tariffs follows the collapse of earlier India-U.S. trade talks, where New Delhi refused to open its agricultural sector to U.S. pressures. Capital Economics analysts warned that the full imposition of these tariffs could reduce India’s economic growth by 0.8 percentage points in both 2025 and 2026, with longer-term impacts potentially damaging India’s status as a global manufacturing hub [2].

The planned visit of U.S. trade negotiators to New Delhi between August 25-29 was canceled, removing a potential avenue for de-escalation or tariff adjustments. Jaishankar criticized U.S. President Donald Trump for conducting foreign policy in a "public" manner, which he described as unusual compared to traditional diplomatic practices. The Indian minister also pointed out that the U.S. has not applied similar tariffs on other major Russian oil buyers like China and the European Union, questioning the consistency of Washington’s approach [3].

India’s Commerce Minister Piyush Goyal also addressed the situation, stating that India is approaching the trade issue with a "very open mind" while remaining firm on its national interests. He emphasized the importance of India-U.S. relations and reiterated that warming ties with China should not be conflated with the U.S. trade dispute [4]. Meanwhile, Russia remains a key trade partner for India, with New Delhi importing 1.6 million barrels of Russian oil per day in the first half of 2025, though it still trails behind China’s 2 million barrels per day. Analysts suggest that Trump’s tariff threats may even strengthen India-Russia ties, as New Delhi continues to deepen cooperation with Moscow [5].

As the U.S. escalates its stance, White House trade adviser Peter Navarro reiterated that the 50% tariffs on Indian goods are expected to take effect as scheduled. In response, China’s ambassador to India voiced support for New Delhi, stating that China "firmly opposes" the U.S. tariff policy. With the trade tensions showing no sign of abating, both countries are likely to face economic and diplomatic consequences in the coming months [6].

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[1] India says U.S. trade negotiations are still going on as fresh ... (https://www.cnbc.com/2025/08/23/india-says-us-trade-negotiations-are-still-going-on-as-fresh-tariffs-loom.html)

[2] India says U.S. trade negotiations are still going on as fresh ... (https://www.reuters.com/world/china/india-says-us-trade-negotiations-are-still-going-fresh-tariffs-loom-2025-08-23/)

[4] India approaching U.S. trade issue with "very open mind", minister says (https://www.reuters.com/world/china/india-approaching-us-trade-issue-with-very-open-mind-minister-says-2025-08-22/)

[5] India, Russia vow to deepen trade ties, defying Trump's ... (https://www.cnbc.com/2025/08/22/india-defies-us-tariffs-to-boost-russia-trade-putin-modi-trump.html)

[6] Trump tariffs live updates: U.S. slams India again for buying ... (https://finance.yahoo.com/news/live/trump-tariffs-live-updates-us-slams-india-again-for-buying-russian-oil-while-china-backs-new-delhi-200619317.html)