India’s trade defence playbook against Trump’s escalating tariff threats reflects a calculated mix of energy sovereignty, legal manoeuvres, selective concessions, and diversification of export markets. 

Despite Washington’s repeated attempts to weaponize tariffs—ranging from 50% penalties in 2025 to the looming 100% authority in 2026—New Delhi has refused to compromise on its fundamental energy security needs.

Trump’s second term has been marked by repeated tariff threats against India, primarily targeting its continued procurement of Russian crude oil. In July 2025, he imposed a 25% baseline tariff on Indian exports, citing high duties and non-monetary barriers.

By August 6, 2025, he escalated this with an additional 25% penalty tariff, bringing the total to 50%. India’s Ministry of External Affairs condemned the move as unfair and refused to halt Russian oil imports, stressing energy security for 1.4 billion citizens.

The levy caused widespread cancellation of export orders, hitting sectors such as textiles, gems, jewellery, and seafood. India responded by strengthening trade agreements with the European Union and alternative markets, while Russian oil imports fell to a 38‑month low by late 2025.

On 2 February 2026, Trump and Prime Minister Modi reached an interim breakthrough. Tariffs were cut to 18%, with Trump claiming Modi agreed to halt Russian oil purchases and commit to $500 billion worth of American goods. India, however, only acknowledged the tariff reduction and a generalised trade target.

Shortly after, the US Supreme Court invalidated broad emergency tariff powers, forcing Trump to rely on Section 122 of the Trade Act of 1974 to impose a baseline 10% tariff. This judicial relief gave India breathing space, while Washington’s inflationary pressures during the Iran war crisis in March–April 2026 forced temporary exemptions for Russian and Iranian oil imports. India’s Russian crude imports surged back to an 11‑month high by April 2026.

By September 16, 2026, the US House passed the Lindsey O. Graham Sanctioning Russia and Iran Act, authorising tariffs of up to 100% on major importers of Russian energy. Although India was not explicitly named, it remains a prime target. Rumours in Washington even suggest penalty caps of up to 500%.

India’s MEA reiterated its commitment to energy sovereignty, stating it would take all necessary actions to guarantee national energy security. Experts warn that a 100% tariff could severely damage India’s trade balance and rupee value, but domestic trade bodies such as the Global Trade Research Initiative have advised New Delhi to avoid unilateral concessions.

India’s defence playbook rests on four pillars. First, prioritising sovereign energy security, with the MEA consistently deploying a “Nation First” narrative.

Second, waiting out tariff waves through judicial relief and exploiting market volatility, as seen when US courts struck down Trump’s broader tariffs and Middle East crises forced Washington to issue waivers.

Third, offering strategic concessions to defuse tensions, such as slashing duties on Harley‑Davidson motorcycles and bourbon, and pledging to scale bilateral trade to $500 billion by 2030.

Fourth, insulating exporters via free trade agreements with partners such as Oman, the UK, and progress with the European Union, ensuring duty‑free access to alternative markets.

India‑US trade relations remain complex. Bilateral trade crossed $240 billion in 2025, with India’s exports to the US at around $87 billion and imports from the US rising sharply to $53–54 billion.

The US remains India’s largest export market, accounting for nearly 20% of goods exports, while energy trade and technology cooperation have deepened.

Yet persistent friction over tariffs, agricultural access, and digital trade rules continues to complicate negotiations. Parliamentary committees in India have urged the government to conclude a Bilateral Trade Agreement swiftly, while safeguarding national interests.

Agencies