U.S. President Donald Trump and Indian Prime Minister Narendra Modi prepare to shake hands as they attend a joint press conference at the White House in Washington, D.C., U.S., February 13, 2025. / REUTERS/Kevin Lamarque/File Photo

With an additional 25 percent tariff on India going into effect on August 28, 2025, officially India has become one of the only two nations who are levied a 50 percent tariff on what they export to the USA. The doubling up happened to punish India for purchasing Russian oil and supposedly enabling Russia to continue its war against Ukraine. Peter Navarro, Trump’s Senior Advisor for trade, openly blamed India for the extension of Russia-Ukraine war. That means this tariff is to control political behavior, not economic that is to control trade as has been the original intent of the Trump tariffs. This assertion is further reinforced when we look at the second country who also was imposed 50% tariff, i.e., Brazil. Its exports to the USA are a lot more than what are from India.

In the tariff war, Trump handled India with kids’ gloves because of his relationship with Modi. He left India’s case for his advisor Peter Navarro to bring before the press; Brazil, on the other hand, he handled himself. He dd not want to give up the opportunity to take on Brazilian President Luiz Inacio Lula da Silva. He openly said in the press debriefings that the imposition of the highest tariff on Brazil was motivated by his wanting to punish Brazil for the prosecution of his ally, Jair Bolsonaro, who is accused of plotting a coup after supporting former President Bolsonaro's allies against the current president Luiz Inacio Lula da Silva. In other words, the case of Brazil is pure hate politics. Lula, who was threatening to fight the Trump tariffs on his country, has finally decided to cool it.

The question is: Is the above true in the case of India? Modi and Trump had been the closest of chums. Modi collected the biggest gathering ever for Trump when he came to Ahmedabad on his visit to India. Modi went out of the way to please Trump whenever, wherever he had the opportunity. Then, why this tariff?

According to this author who endorsed Trump for all his elections and formed a PAC for every one of them that played important part in bringing him to the White House, at least during 2016 election when the race was so tight. What I read here is that it is not Trump who is doing it. It is his senior staff who are simply playing tough to sway India from Russia.

In the meanwhile, India has to cope with the consequences of tariffs, devise a strategy to keep American markets, make the needed sacrifice. There is a silver-lining in it. Because there are many countries who sympathize with India. Then, there are the others who empathize with India as they find themselves in the same situation. The number of those in this latter category is substantial. They are ready to help India, trade with India. This can help India win new friends or new markets or just get closer to them to build India’s diplomatic capital.

One of the major areas in which India will be impacted is fabric/apparel that is dominated by Vietnam and Bangladesh, and India’s tariff for these is more than 60% while the competitors is much lower. In this case, India’s strategy should be to enter new markets and build new relationships. The similar is the case for India’s farm and sea exports, such as shrimp. It will be a good decision to protect India’s farmers. Like in the case of apparels, India should geographically diversify farm and seafood exports. Go to new markets. Another commodity that India exports to America is furniture which is going to see very high tariffs all over. India has to be aware and get ready to enter new markets.

Then, see how Modi’s policy to make friends has paid off India. it has become the world’s largest shipper of Apple iPhone. When Trump threatened tariff on such gadgets, Tim Cook asked for meeting with Trump, went to the White House and got tariff on iPhone lifted which directly helped India. Tim Cook’s visit to Mumbai and Delhi made him a friend of India. Then, another of India’s big exports, pharmaceuticals, is protected from tariffs. In sum, India’s situation with regard to Trump’s tariffs is not that bad.

One area in which India would come out ahead due to the Trump tariffs is the jewelry and diamond business. I attended the opening of the diamond market in Surat and was impressed by the size and organization of the diamond trade that was then being prepared to be the world’s largest diamond market. The 50% tariffs will probably have these prices go up by a premium over the tariff and eventually much higher which will have a global inflation in diamond and jewelry business which will be a boon to the Indian trade.     

Again, this author who knows India better than the back of his hand knows that India is not going to be won over under the tariff pressure. It wouldn’t give up Russia or Putin or any future president of Russia. Throughout its history, whenever India got in trouble due to any country, when India needed a friend, Russia was there. Many times, without asking.

Also, sacrifice is in the blood of India. Indians live not on food but sacrifice in their acts. This Indian behavior will come back if needed. They may live in palaces as kings, or in huts as hermits. They quickly adapt. Do not give in. The fifty-percent tariff strategy to change India’ behavior and to give up friends will not work on India.

Trump is a very astute persons who has very good knowledge and memory. He understands the depth of India-Russia bond. Therefore, I do not expect these new tariffs on India to last for too long. India should behave like a big boy and let not turn it into a combat or shouting match and should continue in treating foreigners with respect and turn them into India’s friends.

The author is a Professor of Management, Seton Hall University, USA. 

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of New India Abroad)