From Friendship to Tariffs: The Shifting Landscape of India-US Trade

India US Trade Tensions: On August 1, 2025, US President Donald Trump announced a 25% tariff on all imports from India. Shortly after, an additional 25% duty was added. This sudden decision has significantly increased trade tensions between the two countries. The US says that India's continued purchase of oil from Russia is giving Russia strength for war. For this reason, the US has imposed these tariffs to put economic pressure on India.

India called the decision illegal and unfair

In fact, India's Foreign Ministry strongly criticized this decision and called it "unfair, unjust, and impractical." India made it clear that such a step hurts the long-standing mutual cooperation and trust. However, India also said that it wants to continue trade talks with the US so that the dispute can be resolved.

Tariffs are making America great again

President Trump defended these tariffs by claiming that America is benefiting from imposing tariffs. He said, "A year ago America was a dead country, but now it has become the warmest and most attractive country in the world." 

India-US Relations Under Obama

However, during Barack Obama's presidency (2009-2017), there was a historic jump in trade relations between India and the US. In the 2013 agreement between Prime Minister Manmohan Singh and President Obama, both countries resolved to make the next decade "transformational" in terms of trade and security cooperation. While the trade between the two countries was $19 billion in 2000, it increased to more than $100 billion by 2014.

US India Cooperation On Many Fronts

During this period, the US and India worked together on many fronts, such as mutual investment, trade policy, cooperation of financial institutions, and promotion of small businesses. Along with this, Indian companies and students made a significant contribution to the US economy. In 2014-15 alone, 1.32 lakh Indian students added about $3.6 billion to the US economy.

Biden India Strategic Partnership

After Joe Biden became president (2021-2024), India-US relations took a new direction. The two countries advanced their strategic partnership in the technological sector. The "iCET" agreement launched in 2022 was a major step to strengthen cooperation in areas such as artificial intelligence, semiconductors, and defense production.

India US Resolved Old Disputes

Apart from this, the Biden administration also paid special attention to resolving trade disputes. In 2023, the US and India resolved many old disputes going on in the World Trade Organization (WTO). As a result, India removed some additional tariffs imposed on the US, and the US administration gave better market access to Indian steel and aluminum products.

However, some issues could not be agreed upon. For example, India did not improve market access for American goods, which could not restore the Generalized System of Preferences (GSP), which Trump had canceled in 2019 itself.

India's growing influence in America

India's economic engagement with the US has deepened during the Biden administration. By 2024, bilateral trade between the two countries reached $212.3 billion. Exports from India to the US grew by 8.3%, and India's exports to the US reached $41.5 billion. US National Security Advisor Jack Sullivan said in Delhi in 2025 that Indian private investment now exceeds that of China and has created more than 4 lakh jobs in the US. Apart from this, about 2 lakh Indian students are studying in the US, which is benefiting the US economy by $7.7 billion every year.

Trump’s Return Strains Old Ties

When Donald Trump became president again in 2025, one of his first steps included imposing heavy tariffs on India. He clearly indicated that now his stance will be tough, even with old partners. According to the 2023 report of the Confederation of Indian Industry (CII), Indian companies have so far invested more than $40 billion in the US and created more than 4.25 lakh jobs in more than 40 US states. States like Texas, New York, New Jersey, Florida, and California have benefited the most from this. Apart from this, Indian FDI has invested billions of dollars in states like Texas, Georgia, and New Jersey.

India-US Trade Faces Challenges

The trade relationship between India and the US has evolved over the decades, but after Trump's return, this relationship is once again surrounded by challenges. On the one hand, India has made a huge investment and contribution to the US economy, while on the other hand, America's new policies can put this partnership at risk.

Although in the past both the countries have resolved disputes through dialogue many times, this time also it is important that India and America work in a spirit of mutual respect, understanding, and cooperation so that the role of both can be strengthened in global politics and economy.