From Obama to Trump: How US–India Trade Shifted from Growth to Tensions (Image Source: ANI)
On August 1, 2025, US President Donald Trump announced a 25% tariff on Indian imports, soon adding another 25%, sharply increasing trade tensions between the two countries. Washington linked the decision to India’s continued purchase of Russian oil, accusing it of “fuelling the Russian war machine.
India’s Ministry of External Affairs called the move “unfair, unjustified, and unreasonable” but confirmed that trade talks with the US would go on. President Trump defended the step, saying tariffs were making America strong and wealthy again. This marks a sharp turn from the approach under Presidents Barack Obama and Joe Biden, when trade ties were largely on a growth path.
During Barack Obama’s presidency (2009–2017), trade between the US and India expanded significantly. In 2013, Obama and Prime Minister Manmohan Singh pledged to boost cooperation in areas like security, commerce, and investment. By 2014, two-way trade had grown from $19 billion in 2000 to over $100 billion.
Key platforms such as the US-India CEO Forum, Commercial Dialogue, and Trade Policy Forum played central roles in shaping policies. Talks on a Bilateral Investment Treaty and steps to improve ease of doing business also brought the nations closer. US exports to India supported over 180,000 American jobs, and Indian investment in the US reached $7.8 billion.
Under Joe Biden (2021–2024), ties deepened through technology, defense, and trade partnerships. The Initiative on Critical and Emerging Technology (iCET) boosted collaboration in AI, semiconductors, and advanced telecom. The revitalized Trade Policy Forum helped resolve long-standing disputes at the World Trade Organization. By 2023, bilateral trade crossed $200 billion for the first time.
India’s investment in the US grew to $12.7 billion by 2020, supporting 70,000 jobs, while nearly 200,000 Indian students contributed billions to the US economy annually. However, the Generalized System of Preferences (GSP) remained suspended after Trump ended it in 2019.
Trump’s return to office has brought a more confrontational tone. His new tariffs have hit India despite the fact that Indian firms have invested over $40 billion in the US, creating more than 425,000 jobs across 40 states. Major beneficiaries include Texas, New York, and New Jersey.
The US-India partnership has historically thrived on trade and mutual investment. While earlier administrations worked to strengthen economic ties, the current tensions underline the need for steady dialogue and cooperation to protect this long-standing relationship.
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