The 25 per cent tariff and additional penalties imposed by US President Donald Trump on India, effective August 1, 2025, should be understood primarily as a temporary negotiation tactic rather than a permanent restructuring of bilateral trade relations.

According to Gaurav Sansanwal, Fellow for the Chair on India and Emerging Asia Economics at the Centre for Strategic and International Studies (CSIS), this tariff affects several key sectors of the Indian economy—electronic goods, pharmaceuticals, refined petroleum products, and gems and jewellery—areas where India has a significant trade surplus with the US.

While it creates an irritant in the relationship, it is not seen as a final or lasting measure, but rather as part of a strategic negotiating approach within the broader context of US-India trade discussions.

Sansanwal emphasised that India’s government is closely monitoring the implications of these tariffs and is actively engaged in seeking a resolution that safeguards India's economic interests. New Delhi is expected to work toward negotiating terms that would alleviate the tariff impact and improve trade outcomes from the Indian perspective.

On the issue of India’s continued energy and defence ties with Russia, which Trump cited as one rationale for the tariffs, Sansanwal described Washington’s criticism as a leverage tactic rather than a fundamental misunderstanding of New Delhi’s position. The US administration, including the previous Biden administration, has recognised India’s historically distinct relationship with Russia.

However, Trump’s administration is strategically using this relationship as leverage to strengthen its bargaining position in trade negotiations. This suggests the move is more about exerting pressure for trade concessions than about severing diplomatic or strategic ties.

The imposition of tariffs within this negotiation framework aligns with a broader pattern of the Trump administration employing maximal pressure tactics in trade matters to push for expedited deal-making, as also noted by former diplomats and experts analysing the situation.

The imposition of a 25 per cent tariff by President Trump on Indian imports is best interpreted as a temporary negotiation instrument aimed at addressing trade imbalances and gaining trade leverage, rather than signalling a permanent or hostile shift in US-India relations. India is expected to respond strategically to protect its interests while continuing negotiations toward a mutually beneficial trade deal.

Based On ANI Report