Donald Trump’s July 30, 2025, announcement of a 25% tariff on Indian imports, paired with a penalty for India’s trade with Russia, is a stinging diplomatic defeat for Prime Minister Narendra Modi. Despite Modi’s high-profile personal rapport with Trump—built on events like “Howdy, Modi!” and a February 2025 White House visit—India has been outmaneuvered, exposing the limits of Modi’s charm offensive and India’s strategic miscalculations.
The tariffs, targeting India’s $87 billion export market to the U.S., reveal a failure to translate bonhomie into tangible concessions, leaving India vulnerable economically and politically.Modi’s approach hinged on personal diplomacy, from public endorsements like “Abki Baar Trump Sarkar” to pitching a $500 billion bilateral trade target by 2030. Yet, Trump’s decision to slap tariffs, while calling India a “friend” but a “tariff king” with “obnoxious” barriers, shows he views India transactionally. Modi’s silence on Trump’s provocations—such as unfounded claims about brokering an India-Pakistan ceasefire—has emboldened this hardline stance. India’s negotiators, led by Commerce Minister Piyush Goyal, misjudged the situation, claiming “fantastic” progress just days before the tariff announcement.
Their refusal to open agriculture and dairy markets, citing food security, was valid but left India exposed to Trump’s reciprocal tariff logic, given its $45 billion trade surplus with the U.S. in 2024.The additional penalty for India’s Russian oil and military equipment purchases is a geopolitical blunder. India’s ties with Moscow, driven by cost and history, are pragmatic, but Modi’s government underestimated Trump’s readiness to use trade as a geopolitical cudgel amid the Ukraine conflict.
By not diversifying energy imports or countering Trump’s narrative, India invited punitive measures that could have been mitigated. The tariffs threaten key sectors like pharmaceuticals and garments, while Chinese competitors reroute goods to Europe at lower costs, squeezing Indian exporters. Domestically, the Congress party has seized on this, with Jairam Ramesh calling it a “catastrophic failure” of Modi’s foreign policy, mocking the “Howdy, Modi!” optics that yielded no dividends.
India’s role as a counterweight to China should have given Modi leverage, but unlike the EU, which secured a deal with zero tariffs on U.S. goods, India’s rigidity squandered this advantage. The absence of a “mini-deal” by the August 1 deadline, while countries like the UK and Japan negotiated lower tariffs, underscores India’s diplomatic inertia. Moving forward, India must pivot to pragmatism in the upcoming sixth round of trade talks, offering targeted concessions in sectors like IT services while protecting core interests.
Diversifying trade partners and reducing reliance on Russian energy are critical to blunt future penalties. Modi’s silence must give way to assertive diplomacy, learning from past leaders like Indira Gandhi. Trump’s tariffs are a wake-up call: personal friendships cannot replace strategic foresight. Without adaptation, India risks further isolation in a shifting global trade landscape, undermining Modi’s narrative of economic and diplomatic strength.