The ongoing economic relationship between India and the United States has encountered significant challenges recently, highlighting the growing friction around tariffs and immigration policies.

United States Representative Pramila Jayapal raised serious concerns regarding these issues during a House Foreign Affairs South and Central Asia Subcommittee hearing.

Her comments underscored the detrimental effects of tariffs impacting both countries' businesses and consumers, underscoring a bilateral strain that threatens long-standing ties.

Jayapal drew attention to the tariffs imposed both in the US and India, describing them as harmful to India's economy while simultaneously inflicting damage on American businesses and consumers.

She pointed out the interconnected nature of the trade relationship, where barriers hurt both parties rather than creating any advantage. To illustrate this, she highlighted a specific example of a fifth-generation family-owned company based in Washington State that depends heavily on agricultural imports from India.

The company, which spans over 120 years of operation, reported that the existing tariffs constitute the most significant threat to its business viability in its entire history. These tariffs have driven costs up to such an extent that the company is now contemplating either downsizing its operations or offshoring production to cheaper markets, signalling a potential loss of jobs and economic activity within the US itself.

This example reflects the broader risks for firms reliant on cross-border supply chains, where tariff policies disrupt established trade flows.

Beyond economic concerns, Jayapal linked these commercial tensions to the deteriorating people-to-people ties between India and the US. She criticised recent US immigration policies, which she described as undermining the long-standing bonds by closing legal pathways for migration.

Jayapal noted a troubling resemblance between current policies and historical discriminatory quotas that limited Indian immigration in the past, thereby threatening social and cultural connectivity alongside economic cooperation.

These alarm bells on trade and immigration came amid escalating trade tensions exacerbated by remarks from former US President Donald Trump. Trump voiced his intention to potentially impose new tariffs on India’s rice exports, accusing India of "dumping" rice at artificially low prices in the American market.

This allegation was part of a broader narrative presented at a White House meeting, during which Trump announced a USD 12 billion aid package aimed at supporting American agricultural producers struggling with low prices.

Farmers attending the meeting voiced their grievances over low-cost imports from countries including India, Vietnam, and Thailand, claiming these imports were depressing domestic agricultural prices.

In response, Trump questioned the absence of additional duties on these imports and pledged to "take care" of the issue, signalling a possible escalation in tariff barriers targeting food staples from India. This stance risks heightening tensions further by forcing a confrontational trade posture rather than seeking mutual compromise.

The timing of these developments is particularly sensitive, as a US trade delegation was conducting discussions in India on 10–11 December 2025. These talks have been slow and fraught with disagreements, mainly revolving around market access and tariff policies.

The continued deadlock poses a growing risk to the strategic economic partnership between India and the US, where unresolved tariff disputes threaten to overshadow broader collaboration goals.

Further complicating matters, the US had already implemented tariffs of up to 50 per cent on most Indian goods beginning in August 2025. This move was partly motivated by concerns over India’s imports of Russian oil amid geopolitical tensions. Trump's new threats concerning rice tariffs add further uncertainty, potentially derailing negotiations and jeopardising future trade relations between the two nations.

The overall picture is one of escalating trade friction during a period when both sides had hoped to deepen cooperation, particularly within the framework of a free and open Indo-Pacific region.

Jayapal’s remarks serve as a stark warning about the damaging consequences of protectionist policies that risk harming not just bilateral trade figures but also the broader strategic partnership and people-to-people ties that underpin long-term relations.

Both countries face the challenge of balancing domestic political pressures with the need for a stable and mutually beneficial partnership. The continuation of high tariffs and restrictive immigration measures threatens to undo years of progress in India-US ties, affecting industries, consumers, and communities on both sides.

Addressing these issues with a cooperative rather than confrontational approach will be essential to avoiding a costly and damaging breakdown in one of the world’s most important bilateral relationships.

Based On ANI Report