US President Donald Trump’s latest move to impose a blanket 25% tariff on all Indian imports from August 1, along with a penalty for doing business with Russia, has stirred sharp reactions in both Washington and New Delhi. But why is PM Modi’s friend, who has visited India in his previous stint in the House upset with his ‘friend’ Narendra Modi?
“Trust has diminished. President Trump’s messaging has damaged many years of careful, bipartisan nurturing of the U.S.-India partnership in both capitals.” Ashok Malik, partner at advisory firm The Asia Group feels. “Politically, the relationship is in its toughest spot since the mid-1990s.”
Aditi Nayar, Chief Economist, ICRA was quoted in CNBC-TV saying she believes the tariff bomb is “likely to knock GDP growth” if it lasts beyond a quarter.
Eswar Prasad from Cornell and Brookings & Nisha Biswal of US-India Business Council shared their views with Barron’s, claiming 25% tariffs move shows Trump’s readiness to punish even allies to advance sanctions policy; risks undercutting Indo-Pacific strategy that relies on India as China counterweight.
Why is Trump miffed with India?
1- High Indian tariffs and trade barriers: Trump is seemingly frustrated with the ongoing India-US trade negotiations. The negotiators have held multiple rounds of discussions to resolve contentious issues, particularly over access into India’s agricultural and dairy products. But there has been no headway. After announcing a 25% extra tariff US president has also announced deal to be final by end of week.
India has maintained that it will protect and promote the welfare of its farmers, entrepreneurs, and small businesses. “The government will take all steps necessary to secure our national interest, as has been the case with other trade agreements,” it said.
Trump has long complained about what he calls India’s “strenuous and obnoxious non-monetary trade barriers” and high import duties on US goods. Calling Modi a friend but India a tariff king Donald Trump and his advisers have criticised India for imposing high tariffs on American goods, making US exports less competitive.
“We had a tremendous deficit. Prime Minister Modi is a friend of mine, but they don’t do very much business in terms of business with us. They sell a lot to us, but we don’t buy from them…Because the tariff is so high. “They have one of the highest tariffs in the world. “
“Now, they are willing to cut it very substantially. But we will see what happens. We are talking to India now,” he added, claiming a deal will be done by the end of the week.
2- India’s ties with Russia: Another sticking point between Trump and Modi is India’s longstanding relationship with Russia. Trump criticised India for continuing to be “Russia’s largest buyer of energy, along with China,” despite the ongoing war in Ukraine. He also questioned India’s heavy reliance on Russian military equipment, arguing that such ties contradict Western pressure on Russia.
India and Russia’s bilateral trade reached approximately $68.7 billion in FY 2024-25, a record high and nearly six times the pre-pandemic level.
Russian oil now accounts for 35–40% of India’s total crude imports, up from just 0.2% before the Russia-Ukraine conflict in early 2022. Oil imports averaged around 1.63–1.78 million bpd and far surpassing what India sources from Iraq or Saudi Arabia
Private Indian refiners like Reliance Industries and Nayara Energy buy about half of all Russian oil brought in.
3– Trump sees BRICS as ‘anti-US’ & ‘anti-dollar’: It’s not just Russia, Trump views BRICS as fundamentally opposed to US interests. He calls the group it ‘anti-United States.’ He highlighted India’s membership as especially troubling, questioning, “India is a member of that, if you can believe it. He has called it an “attack on the dollar and we’re not going to let anybody attack the dollar,” he has stated.
The tariffs are seen as a way to force India to agree to concessions in stalled trade talks, just weeks before a US trade delegation was due to negotiate in New Delhi.
Trump made his stand clear during a White House briefing, “BRICS, which is basically a group of countries that are anti the United States and India is a member of that…It is an attack on the dollar and we are not going to let anybody attack the dollar.” Stating “it’s partially BRICS and it’s partially trade.”
Despite expressing personal friendship with Prime Minister Modi, Trump has indicated that India’s dual play—courting strategic ties with the US while deepening engagement with BRICS and Russia—is unacceptable. Trump insists the US will respond assertively if India continues with BRICS policies perceived as hostile to American economic leadership and interests.