Trump‘s Remarks Add Complexity to India‘s Trade Relations with US
Recent comments by former US President Donald Trump wishing India, Russia, adn China “a long, prosperous future together” are introducing new political sensitivities into India’s ongoing trade negotiations with the United States.This comes at a time when India is actively seeking investment from the SCO bloc and navigating complex economic relationships with both russia and China.
During the SCO summit on Monday, Prime Minister Narendra Modi invited leaders of the bloc to invest in Indian startups and initiatives focused on shared cultural heritage, emphasizing that supporting entrepreneurship and innovation could boost regional trade and economic cooperation.
However,India’s trade talks with the US hit a snag when Washington abruptly paused negotiations for the sixth round of the Bilateral Trade Agreement (BTA) without providing a specific reason or a new timeline. The US negotiating team was originally scheduled to visit New Delhi on August 25th.
Despite the pause, Indian officials, including the commerce minister, have stated that the talks remain on track, aiming for a deal by November 2025 or the fall of 2025, as initially outlined during Prime Minister modi’s visit to Washington in February. Trump’s recent remarks, though, suggest potential political hurdles to reaching that goal.
India has continued to purchase discounted crude oil from Russia despite Western sanctions and pressure. It also remains reliant on Chinese inputs for key sectors like electronics, chemicals, and machinery.
Adding another layer of complexity, the US imposed an additional 25% tariff on India, effective August 27th, for continued imports of Russian oil, bringing the total punitive tariffs to 50% – among the highest globally. Brazil also faces a 50% tariff, though not as a penalty related to Russian oil.
Experts suggest Trump’s rhetoric could lead to a more assertive stance from Washington. “The Trump governance has already adopted a tough line on reciprocal tariffs and non-tariff barriers. If the perception grows that India is leaning toward Russia and China, it may complicate the final stages of the BTA,” explained Dr. Amit Singh, an associate professor at the Special Centre for national Security Studies, Jawaharlal Nehru University.
Despite thes challenges, the US remains India’s largest trading partner. In FY25, India exported $87 billion worth of goods to the US, representing 2.3% of India’s GDP. Key export sectors include engineering goods ($19.16 billion), electronics ($14.64 billion),drugs and pharmaceuticals ($10.52 billion), gems and jewelry ($9.94 billion), and textiles ($10.91 billion), collectively contributing $65.17 billion.
India’s total merchandise exports, excluding petroleum, reached a record $374.1 billion in FY25, a 6% increase from $352.9 billion the previous year.
