'25-year relationship went down in 25 hours': Why Trump walked away from an India trade deal at the last minute
&imwidth=600&imheight=450&format=webp&quality=medium "'25-year relationship went down in 25 hours': Why Trump walked away from an India trade deal at the last minute")
Why Trump walked away from an India trade deal at the last minute? Photograph: (Reuters)
Trade talks between India and the US collapsed after President Trump imposed steep tariffs, citing India’s insufficient tariff cuts, straining relations despite earlier progress and high-level diplomatic efforts.
An early visit by Prime Minister Narendra Modi to the White House had sparked months of talks between India and the United States. By July, Indian officials believed a deal had been finalised and was only awaiting President Donald Trump’s approval. But that approval never arrived. Instead, Trump announced steep tariffs, a 25% duty on Indian goods, followed by another 25% aimed at discouraging India from buying Russian oil. The combined 50% tariff has dealt a blow to relations between the two countries.
Tariffs derail trade hopes
The collapse of the talks reflected Trump’s dissatisfaction with India’s tariff cuts. While New Delhi had agreed to reduce many barriers, it stopped short of the near-zero rates offered by countries like Indonesia. A US official said the Indian offer was “totally insufficient” compared with other deals Trump had secured.
Mukesh Aghi, head of the US–India Strategic Partnership Forum, told POLITICO, “We are in a situation now where he is completely upset with India, and the 25 years of effort to build a relationship seems to be going down in 25 hours.”
Shifting focus to Europe
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In mid-July, Trump had said a deal with India was close, but his attention quickly moved to talks with the European Union. Negotiations with India stalled, despite expectations in New Delhi that a leader-to-leader conversation could finalise the agreement. Modi, wary of being publicly criticised, avoided such a call. US officials noted that agreements with Japan and South Korea had been reached without direct talks between leaders.
Russian oil at the centre of tensions
The situation escalated when Trump targeted India with an extra 25% tariff over its continued purchase of Russian oil. India bought $52.7 billion worth of Russian oil last year, refining some for sale to Europe. New Delhi insists these imports are essential for its energy security and objects to being singled out when other countries, including the EU and Turkey, also buy Russian energy.
Randhir Jaiswal, spokesperson for India’s Ministry of External Affairs, said it was, “extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.”
Talks still on the table
Trump has hinted that other nations could soon face similar measures, saying, “You’re going to see a lot more.” Despite the tensions, discussions continue. A breakthrough before the 27 August deadline could prevent the tariffs from taking full effect. Aghi noted that Trump has avoided criticising Modi directly, suggesting the White House is keeping channels open.
