Trump India Tariffs Call: It’s Beyond Geoeconomics

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It’s a defining “Vishwa Guru” moment in geopolitics for India as the World watches how it responds to the tariff hike plus penalty by the US President Donald Trump

Seen as a major disruption in India United States relations and not just economic or trade, U.S. President Donald Trump announced 25 % tariffs plus penalty on India which he described as a “friend”.

In a tweet on his social media platform Truth Social on Jul 30, 2025, 5:39 PM, President Trump stated, “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country. Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!”

It is entirely the prerogative of the U.S. government to impose tariffs on a country even if this is not within global norms of trade and so it is that of India, yet the manner in which the Presidential announcement came even as the commerce and trade representatives had been negotiating an agreement may have surprised many.

This set the ‘cat amongst the pigeons,’ so to say as the Indian parliament was intensely debating Operation Sindoor the 87 hours India Pakistan mainly air and missile skirmish which US President Trump had claimed now more than a dozen times that he had brought and end to.

The Indian government has vehemently denied any role for the United States and Mr Trump with the opposition party bloc INDIA chastising for bending down to Washington there was no looking back.

There are a host of options being debated from a hardline approach as adopted by Brazil to buckling under pressure as some of the countries which need not be named here did.

Indeed, India needs to follow its own path. A statement from the Ministry of Commerce and Industry in New Delhi which came three hours after Mr Trump’s tweet said as much

To quote, “The Government has taken note of a statement by the US President on bilateral trade.  The Government is studying its implications. India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective. The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK”.

India’s options thus remain continuing negotiations to achieve a fair and mutually beneficial trade agreement with the United States as with other countries and arrived at one that in mutual interest without sacrificing the well being of some of the most economically vulnerable communities – agriculture and dairy as well as the MSMEs.

Towards that end there may be some pain in some of the sectors which may have to be borne till an agreement is reached the time line for which appears open ended for now.

The second aspect is of sovereignty. India’s rights to chose strategic partners in terms of arms imports.

Mr Trump and previously some US officials have warned India to stop buying arms and oil from Russia.

Indeed, this is part of the objective to bring pressure on Moscow for the War in Ukraine. India has not supported the War per se but cannot change a long standing strategic partner as Russia which has supplied critical military weapons and equipment in a short span of say three years plus.

Indeed, mindful of US as well as other Western concerns, India has prudently not inked any fresh weapons orders from Russia in the past three years but for those in the pipeline.

Concomitantly it should be noted that India has signed up for billions of dollars of new weapons from the United States such as the Predator MQ 9 Reaper drones. New Delhi also has a vast military arsenal from the United States ranging from Apache attack helicopters three of which landed just last week to artillery guns, medium and heavy lift transport aircraft and maritime surveillance assets.

More over India’s programme of Atma Nirbhara Bharat in defence is producing results but till then dependency on Russia or the United States amongst other countries will continue.

Penalising the country when it is facing a two front fused aggressive challenge from China and Pakistan by a close strategic partner the United States a fellow member of QUAD is completely unjustified.

Indeed, the reasons for the same are geo-political as much as geo-economic ranging from India’s lack of acknowledgement of US President Donald Trump’s role in ending Operation Sindoor with Pakistan amongst other issues. The frustration with Russia for continuing with the war in Ukraine and not readily agreeing to a cease fire could be another. Influence of the MAGA lobby within the US could be a third.

Clearly this is more than about trade it is about choices made by a nation and impacts sovereignty.

While continuing to negotiate on the trade and tariffs, India needs to send a clear signal that it will not compromise on sovereign decision making.

The worst-case scenario envisaged in economic terms is a loss in GDP of less than one percent, which can be offset by other engagements already in place or ongoing such as the India UK FTA or one with European Union amongst others.

India’s choices will define its role in geopolitics in the future, a matured balancing of national interests with universal principles of fairness and equity should be the way ahead.