During his address to the US Congress on March 4, 2025, US President Donald Trump once again referred to India’s ‘high’ tariffs vis-à-vis the US. Said Trump: “India charges us tariffs higher than 100 percent, China’s average tariff on our products is twice what we charge them, and South Korea’s average tariff is four times higher. This is happening by friends and foes alike. The system is not fair to the US; it never was.”
US Secretary of Commerce Howard Lutnick echoed Trump’s concerns about India’s high tariff rates while speaking at the India Today Conclave. Lutnick also underscored the fact that both sides needed to examine the possibility of a comprehensive trade deal rather than examining tariffs on individual commodities. He said that both countries needed to do something “grand” and not “product by product”.
Days earlier — on March 5, 2025 — India’s External Affairs Minister S. Jaishankar stated during a session at a London-based think tank that India is working towards a bilateral trade agreement with the US. Jaishankar also said that Trump’s policies were leading to “multi-polarity” which suited India. It would be pertinent to point out that in January 2025, S. Jaishankar made an important point remarking that some of Trump’s policies “may be out of syllabus”, but India would also need to adopt “an out of syllabus” approach to deal with the same.
Lutnick made two other significant points. First, India’s purchase of defense equipment from Russia and India’s participation in BRICS. While commenting on India’s purchase of weapons from Russia the US Commerce Secretary said that it “needs to end”.
On India’s participation in BRICS
The comment about India purchasing defence equipment from Russia is significant, because many believe that Trump’s personal rapport with Russian President Vladimir Putin and his approach vis-a-vis the Russia-Ukraine conflict may give more space to India to cultivate its ties with Russia. While the U.S. President is actively seeking a solution, many believe his approach appears to favor Russia. On March 7, however, Trump while issuing a warning to both Russia and Ukraine issued a strong warning to Moscow. Said Trump: “Based on the fact that Russia is absolutely ‘pounding’ Ukraine on the battlefield right now, I am strongly considering large-scale Banking Sanctions, Sanctions, and Tariffs on Russia until a Cease Fire and FINAL SETTLEMENT AGREEMENT ON PEACE IS REACHED.”
It remains to be seen how things pan out between the US and Russia and whether the Trump administration is likely to make a purchase of weapons from Moscow a major issue.
Regarding BRICS and De-dollarisation, the US President has repeatedly issued warnings that the US would impose sanctions on BRICS countries if they go ahead with a currency. Trump had also stated, that BRICS was dead after he issued repeated warnings. India on its part has clearly distanced itself, on more than one occasion, from the BRICS currency and senior officials have categorically stated, that it has no desire whatsoever to weaken the US Dollar in any way. India has been pushing trade in local currencies to circumvent the sanctions the US had imposed on Russia. S Jaishankar during his talk on March 5 said that the US Dollar is a source of “global stability” and that there was no real unanimity within BRICS members regarding replacing the US Dollar.
India-US ties and the Iran factor
Another issue that could pose to be thorny is India’s ties with Iran. The Trump administration had last month removed the sanctions waivers on the Chabahar Port – during his earlier stint, Donald Trump had provided India waivers for the development of the project which is strategically important. India has been involved in the development of the Shahid Beheshti Terminal at the strategically located Chabahar Port. India views Chabahar as an important economic gateway to Afghanistan, Central Asia, and beyond. In December 2018, India Ports Global Limited (IPGL) took over the port’s operations. In May 2024, India signed a 10-year agreement with Iran for management of the terminal.
In conclusion, the remarks of the US Commerce Secretary clearly highlight the fact that India-US divergences may not be restricted merely to tariffs, but on important geo-political issues. While there is no doubt that some of Trump’s policies may result in some economic opportunities for India in the longer term, New Delhi is also likely to face some serious challenges, at least in the short run, which arise from the same.
It remains to be seen how New Delhi navigates with the possible disruptions arising out of Donald Trump’s unpredictable policies on important economic and geopolitical matters.
[Photo by the White House, via Wikimedia Commons]
The views and opinions expressed in this article are those of the author.
Tridivesh Singh Maini is a New Delhi based analyst interested in Punjab-Punjab linkages as well as Partition Studies. Maini co-authored ‘Humanity Amidst Insanity: Hope During and After the Indo-Pak Partition’ (New Delhi: UBSPD, 2008) with Tahir Malik and Ali Farooq Malik. He can be reached at [email protected].
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