2025.08.28

Trump meets with Modi at the White House

The writer.First Finance Qian Xiaoyan

The United States 'punitive tariffs on India came into effect as scheduled, and India now has no intention of "giving in."

According to Xinhua Agency, the U.S. government imposed a 25% punitive tariff on Indian goods exported to the United States on the grounds that India imported Russian oil officially took effect on the 27th. So far, the total tariff rate imposed by the United States on Indian products has reached 50%.

Faced with pressure, the Indian government has announced a number of policies that focus on helping farmers and small business owners cope with the tariff shock, while laying out an uncompromising "red line" to the U.S. side.

Liu Sui, director of the South Asian Research Center of the Shanghai Institute for International Affairs, told the first financial reporter that India's purchase of Russian oil is not a new issue in US-India relations, and India believes that this practice has long been granted by the United States.

Trump attended a joint press conference in the White House on February 13 with visiting Modi

Modi doesn't answer the phone

On August 27, when the 50% penalty tariff came into effect, Modi presided over a cabinet meeting. According to Indian media reports, the meeting focused on how India should deal with the impact of U.S. tariffs, but Modi himself did not publicly comment on the tariff dispute that day.

In the United States, Navarro, an adviser to the US president, further pressured India on the 27th to stop buying Russian oil, saying that India's actions have caused losses to the United States, but then he changed the subject and said: "If India stops buying Russian oil, it can get a 25% tariff reduction tomorrow."

Earlier, Trump cried out on the 26th, referring to Modi as a "great person" in his speech, saying he had called Modi in May to promote a ceasefire in India and Pakistan within five hours. This claim has previously been challenged by India and frustrated. Per for this reason, Modi is no longer willing to listen to the call from Trump.

At the same time, in the trade negotiations, Trump often in the calls "not in line", such as Trump in the call with Vietnamese leaders, he raised the tax rate raised in previous negotiations, for the above reasons, have made Modi appear cautious about receiving the phone call.

India¡¯s Foreign Secretary Sujetin, who criticized U.S. tariffs on India¡¯s energy trade policy on an event in New Delhi on August 23, said it was ¡°reckless¡± from the U.S. government, which is ¡°pro-business.¡±

Up to now, the United States and India have held five rounds of negotiations on trade issues, and no agreement has been reached. A new round of negotiations on a bilateral trade agreement between India and the United States, originally scheduled to be held from August 25 to 29, has been postponed, and the trip of the U.S. trade delegation to India has not happened. During the negotiations, Indian officials were once optimistic that the upper limit of US tariffs on India would be set at 15%.

When Trump announced the so-called ¡°peer-to-peer tariffs¡± in April, India was pleased with a relatively low 26% tax rate, and now transit, India¡¯s 50% tax rate is not only much higher than neighboring countries such as Pakistan (19%) and Bangladesh (20%) but also higher than economies such as Vietnam (20%) and Indonesia (19%) .

Modi rejected four calls from Trump in a row, data map

India¡¯s Red Line

Pancage Chada, chairman of India's Engineering Export Promotion Commission, said: "U.S. customers have stopped placing new orders, and the impact of these additional tariffs (India-related products) could reduce exports by 20 to 30 percent."

The Indian government estimates that U.S. tariffs will hit Indian exports worth US$48.2 billion. Data from the U.S. Department of Commerce shows that in 2024, the volume of US-India trade in goods will be approximately US$128.8 billion, and India's trade surplus with the United States will be US$45.8 billion.

In response to tariff pressure from the United States, the Indian government has taken a series of measures to deal with the challenges. Sujashen said on the 23rd that the negative impact of the trade dispute between the two sides on the Indian economy will not be permanent."The most important thing is that we have drawn some red lines. No one said the negotiations broke down. In this sense, negotiations are still going on."

Indian trade ministry officials said India¡¯s tariff-stricken exporters will receive financial assistance and are encouraged to diversify exports to markets such as Latin America and the Middle East.The official said India has identified 50 countries and regions as the focus of India¡¯s export growth, in textiles, food processed products, leather products and seafood.

Small editorTagged grace.

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