The US Commerce Secretary Howard Lutnick publicly predicted that India, despite its current strong resistance, will likely return to the negotiating table with the US within the next one to two months “saying sorry” in order to try and strike a trade deal. Lutnick warned India that unless it changes course by opening its market, stopping its purchases of Russian oil, and distancing itself from the BRICS grouping (which includes Russia and China), it risks facing crippling tariffs of up to 50% on its exports to the US.
He described India’s defiance as “all bravado” because while it feels good to stand firm against the US, businesses will eventually push for a deal to maintain access to the lucrative American market.
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The backdrop to this dispute involves India continuing to buy Russian oil extensively, benefiting from significantly discounted prices due to Russia’s need to find buyers.
The US, under President Donald Trump, responded to this by imposing an initial 25% reciprocal tariff on Indian goods, which was followed by an additional 25% tariff specifically as a penalty for India’s Russian oil imports, bringing the total tariff burden to 50%.
India has called these tariffs “unjustified and unreasonable” and has maintained that its energy procurement decisions, including sourcing Russian oil, are based on national strategic interests and economic considerations such as price and logistics. India’s Finance Minister Nirmala Sitharaman reiterated the country’s position to continue buying Russian oil as it suits India’s needs.
The tariffs pose a significant threat to Indian exports, with estimates showing potential losses of billions in revenue, given that India’s exports to the US were around $87 billion in 2024. Experts warn that these tariffs could hurt India’s export-dependent sectors and threaten jobs in labour-intensive industries like textiles, gems, and jewellery.
The stand-off also risks undermining the broader US-India strategic partnership and complicates geopolitical alignments, especially as India aims to maintain a balancing act between the US, Russia, and China via the BRICS alliance.
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In the wider diplomatic context, the Trump administration frames the tariffs as a tool to leverage India into aligning more closely with US geopolitical and economic interests, including cutting ties with Russia and supporting the US dollar in trade.
However, India asserts its right to independent foreign policy decisions based on national interest. The US Commerce Secretary also indicated that the ultimate decision on how to engage with India rests with President Trump.
Despite the tensions, some Indian officials have expressed hopes for concluding a bilateral trade deal with the US by November, attempting to navigate the complex trade and geopolitical landscape. Meanwhile, official Indian statements reject misleading claims and emphasize safeguarding national interests amid the tariff showdown.
The US-India trade crisis in 2025 centres around US-imposed tariffs directly linked to India’s purchase of Russian oil. The US expects India to realign with its economic and geopolitical stance or face sustained punitive tariffs, whereas India defends its strategic autonomy and economic pragmatism.
The situation remains tense, with high stakes for trade, diplomacy, and broader geopolitical relationships in the Indo-Pacific region.
Based On NDTV Report
Agency
