The diplomatic relations of Washington and New Delhi have recently hit a new low. Relations were once driven by democratic alignment, shared values and convergence of strategic goals, and now are shaped more by strategic pragmatism. Already, frictional bilateral relations between the US and India are gradually clouded by inflated tariffs, transactional friction and the long-standing principle of strategic autonomy of India. After the US-mediated ceasefire between India and Pakistan, heated arguments against the US, which are subtle yet not-so-subtle, are made by the Indian officials. This current rift between the US and India has some roots in India’s aversion to democratic values.
In early 2025, US President Donald Trump significantly raised tariffs on imports from India. The tariffs started with a 25% in July and escalated to a broad 50% in early August, citing that India continued to purchase Russian military equipment and Russian energy as a justification. This can incur severe economic consequences for India. According to the global credit rating agency Fitch, the successful US tariff rate on the goods of Indian has surged to 20.7% in 2025, an evident rise from 2.4% in 2024.
The instant fallout moved through markets and affected the source of investor sentiment. The Indian equity indexes recorded five weeks of losses, and the capital shifted towards safer assets such as silver and gold. While the Indian rupee weakened, energy and base metal prices met with volatility.
This worsening situation is the breakdown of the earlier cordial personal relationship between President Donald Trump and Prime Minister Modi. At one time marked by the enthusiastic “Howdy Modi†rallies, these friendly ties provide a limited shield against growing protectionist pressure. On one side, where Trump felt sidelined by India for the role of brokering a ceasefire between India and Pakistan, he was nominated for the Nobel Peace Prize by Pakistan because of his constructive third party role in de-escalating the conflict between. As Trump distances himself from the partnership of India, India opted push back with criticism rather than compliance. The Defence Minister of India, Rajnath Singh, highlighted that particular actors may maintain reservations regarding India’s rapid progress, undermining the nation’s resilience and prominence by asserting “Sab Ky boss to hum hain.†Modi has himself announced his desire to “pay a very heavy price†to safeguard the trade and strategic interests of India, specifically in critical sectors such as manufacturing and agriculture. The prominent critics like MP Tewari have gone further, formulating the tariffs as a tribute to India’s “strategic exceptionalism.†This suggests that India perceives the US as endeavoring to impose coercive pressure on it.
In July 2025, the US imposed 50% tariffs on Indian exports, which were linked to New Delhi’s defence and energy ties with Russia, raising concerns over the strategic partnership. The reports revealed that India paused a major US arm acquisition, worth billions, which includes the Javelin missiles and Stryker Vehicles. India responds in defiance in turn, refusing the sale of the F-35 fighter jet. Despite earlier US overtures during the visit of Modi in Washington in 2025, a mark that the Indian strategic culture might be giving way to nationalist calculus.
India’s pursuit of the†Mission 500â€, an ambitious goal to raise bilateral trade with the US to $500 billion by 2030, remains active but uncertain. Agreements, such as Transforming the Relationship Utilising Strategic Technology (TRUST) and the Critical and Emerging Technology (iCET), are intended to underpin deeper collaboration in AI, Space, defence and the semiconductors. However, with tariffs now overshadowing this cooperation framework, the expected strategic convergence can diminish.
To counter the US economic rift, India targets the Global South platforms in West Asia, Africa. For example, India deepened engagement with the Global South by advancing the India-Africa summit and building partnerships with West Asia, such as Chabahar Port. It also expands BRICS and the New Development Bank to counter the US-led institutions. India aims to provide exports at more competitive prices and access a wider market as compared to what the US does. The promotion of India’s supply chain resilience is supported by schemes like Make in India, Atmanirbhar Bharat. Japan and Australia have signed agreements with India because of alignment with the US policy under QUAD. The tilt of the US away from India could provoke similar reversals from the other US allied states, too. Will the geopolitical realignment and the trade competition prevail? Yes, the recent US tariffs on India highlight a growing friction in the US-India relationship. This implies that India is no longer considered a reliable strategic partner in the Asia Pacific. These tariffs also impact on the sectors related to defence. The US tariffs on India not only strain Delhi’s defence acquisition with Washington but also highlight emerging Vulnerabilities in the defence supply chain of India that could alter regional power dynamics. India countered the US tariffs by increasing its trade with the Global South. However, its most important strategic partners, like Japan and Australia, will follow suit as per US policies. Hence, changing US policies in this current geopolitical landscape, India’s ambition of global and regional hegemony has a grim future as they are no longer backed by US support.
This article was published in another form at https://thediplomaticinsight.com/us-india-relations-under-strain/ and https://stratheia.com/tariffs-and-strategic-autonomy/
Shahwana Binte Sohail is is Research Assistant at the Centre for International Strategic Studies Islamabad.
