By T N Ashok
NEW YORK: In the summer of 2017, when U.S. President Donald Trump hosted Indian Prime Minister Narendra Modi in the White House Rose Garden, the atmosphere was charged with warmth. The two leaders clasped hands, exchanged bear hugs, and spoke of a shared vision — a strategic partnership to shape the 21st century.
That camaraderie has now dissolved into one of the most bruising trade confrontations in decades, as a tense phone call this month between the once-affable “buddies” set in motion a chain of events that jolted global markets, froze defence deals, and tested the resilience of one of Washington’s key alliances in Asia.
At the heart of the rupture is the issue of Russian oil. According to diplomatic sources in Washington, the unravelling began with an unusually blunt conversation. The call, arranged at Trump’s request, was expected to be a routine check-in on the Ukraine war and trade ties. Instead, it turned into a confrontation.
Trump, who had been escalating his threats of “secondary sanctions” on countries buying from Moscow, told Modi that India’s continued purchase of discounted Russian crude was undermining his ceasefire ultimatum to the Kremlin. His message was clear: stop the oil imports, or face consequences. Modi, firm and measured, reiterated India’s long-held stance — New Delhi would buy from wherever it secured the best deal to protect its energy security, while advocating a peaceful resolution to the Ukraine conflict.
The exchange grew sharper when Trump warned that punitive tariffs would follow if India did not change course. “I’ve been a friend to India, but I can’t allow this,” he reportedly said. Modi countered that strategic autonomy was non-negotiable. The call ended without agreement — and within days, the first blow landed.
On August 6, Trump signed an executive order slapping an additional 25% “penalty” tariff on Indian goods, citing India’s “sustained purchases” of Russian oil despite Western sanctions. This was on top of an earlier 25% reciprocal tariff announced in July, effectively doubling the levy on Indian exports to the United States — India’s single largest export market — to a bruising 50%.
The rate dwarfed the 15–20% tariffs applied to most Asia-Pacific countries and was higher than even the new duties imposed on EU and Japanese goods. Trump left no ambiguity: “No trade talks with India until this is resolved.”
The move was part of a broader tariff blitz. Just after midnight on August 8, goods from over 60 countries and the European Union became subject to tariffs of 10% or higher, with the White House projecting “unprecedented growth” from reshoring manufacturing. Yet, the immediate market reaction showed strains: U.S. retailers scrambled to adjust supply chains, and analysts warned of higher consumer prices.
Even as Washington fumed, Modi doubled down on his Russia outreach. On August 8, he held what he called a “very good and detailed conversation” with President Vladimir Putin. The two leaders reaffirmed their “Special and Privileged Strategic Partnership” and reviewed Ukraine developments. Modi thanked Putin for his “detailed assessment” of the war and reiterated India’s call for a peaceful settlement — but conspicuously avoided any public commitment to reduce oil imports.
The timing was of crucial significance.. For Trump, it reinforced the perception that New Delhi was defying U.S. pressure. For Modi, it was a signal that India would not be bullied out of its energy strategy.
As the tariff row deepened, Reuters reported that India had paused plans to buy new U.S. weapons and aircraft, cancelling a planned visit by Defence Minister Rajnath Singh to Washington. It was the first concrete sign of strategic pushback. Though India’s Defence Ministry publicly dismissed the reports as “false and fabricated,” insiders confirmed that procurement cases were “being reassessed” in light of the tariff escalation.
The pause, if sustained, could affect billions in prospective defence sales, from fighter jets to helicopters, and dent Washington’s ambitions to make India a counterweight to China in the Indo-Pacific.
For India, the 50% tariff struck at a sensitive spot — its textiles and chemicals sectors, which are heavily export-oriented. The U.S. accounts for 28% of India’s $36.6 billion textile and apparel exports. Moody’s Ratings quickly warned that the tariff could slow India’s GDP growth by 0.3 percentage points from its 6.3% forecast for FY2025-26, undermine the “Make in India” initiative, and deter investment in higher-value manufacturing like electronics.
Yet, the agency also noted India’s strong domestic demand and robust services sector would cushion the blow. Exporters urged the Commerce Ministry to roll out targeted support, while trade strategists advised New Delhi to “aggressively pursue” a free trade agreement with the EU to offset U.S. market losses.
The tariff shock reverberated far beyond Delhi and Washington. Israeli Prime Minister Benjamin Netanyahu, himself navigating complex U.S. ties, offered to “advise” Modi on dealing with Trump, calling the U.S.–India relationship “very solid” and urging resolution.
Former Indian diplomat Rakesh Sood offered a more sardonic take: “There are two things President Trump loves — tariffs and the Nobel Peace Prize. We’ve not given him comfort on the Nobel, so I guess we are facing the tariffs.”
Across the aisle in Washington, criticism poured in. A former U.S. official said the way Trump spoke about Modi “was not befitting of an ally,” while Indian opposition MP Shashi Tharoor urged a rethink of the strategic partnership with a U.S. that had “changed its attitude.”
And then came the awkward statistic: U.S. government trade data showed Washington itself had traded more with Russia in certain sectors than with Ukraine, even as it penalized India for doing business with Moscow — a hypocrisy not lost on New Delhi.
The India penalties were part of a sweeping Trump tariff doctrine that spanned continents. The U.S. imposed 15% tariffs on EU, Japanese, and South Korean goods, 20% on Taiwan, Vietnam, and Bangladesh, and readied a 55% levy on Chinese products if a new trade deal failed.
Tariffs were even weaponized for industrial policy: Commerce Secretary Howard Lutnick announced that semiconductor firms building plants in the U.S. during Trump’s term could avoid chip tariffs altogether.
Trump framed it as a strategy to “rebalance America as a manufacturing power,” projecting “hundreds of billions” in tariff revenue. But U.S. businesses warned of higher input costs, and economists noted the domestic economy was already showing signs of strain.
For those who remembered the 2017 Trump–Modi summit, the contrast could not be sharper. Back then, the leaders’ chemistry was seen as a strategic asset — a bridge between the world’s largest democracy and its oldest. Trump had praised Modi as a “true friend,” while Modi lauded Trump’s leadership and vision.
The partnership deepened in defence, counterterrorism, and energy. Modi hosted Trump in Ahmedabad’s Motera Stadium in 2020 to a roaring crowd of over 100,000 — a rally that Trump called “unforgettable.” Even during the pandemic disruptions, trade talks continued.
But the Ukraine war changed the calculus. For Trump, facing a make-or-break moment in his foreign policy narrative, India’s oil imports became a symbolic test of loyalty. For Modi, refusing to bow to tariff blackmail became a test of sovereignty.
With the August 27 implementation date looming for the 50% tariff, both capitals are scrambling for damage control. Indian ministries are preparing sectoral support packages and exploring non-U.S. export markets. The U.S. business lobby in Delhi is quietly urging the White House to reconsider, warning that the tariffs could push India closer to alternative partners like Russia and China.
Diplomats note that neither side wants a complete rupture. The Indo-Pacific strategy, intelligence cooperation, and shared concerns over China still bind Washington and New Delhi. But repairing the personal equation between Trump and Modi — once central to the relationship — may prove harder.
The next test could come as early as September, when leaders are expected to attend the G20 Summit. Whether they exchange another hug or a frosty handshake will be watched as closely as any communique.
From friendship to fracture, the Trump–Modi tariff war is a reminder that in geopolitics, personal bonds are fragile currency. In 2017, the two men sold the world a vision of partnership. In 2025, they are selling each other tariffs. And somewhere between those phone calls and those hugs lies the lesson that, in diplomacy, warmth is no substitute for aligned interests. (IPA Service)
