Trump Tariff Policy Is Creating A Political Battle In India

India’s political storm just got hit with a Trump-sized thunderclap.

Prime Minister Narendra Modi, who’s been walking a tightrope between U.S. trade demands and his own domestic priorities, is now under fire after failing to secure a trade deal with Washington — and President Donald Trump is cranking up the heat.

On Wednesday, Trump threatened to slap a 25% tariff on Indian imports and pile on additional penalties if New Delhi doesn’t scale back its business with Russia. And he didn’t mince words in his Thursday Truth Social posts, blasting India for “strenuous and obnoxious non-monetary trade barriers,” sky-high tariffs, and its “vast majority” purchases of Russian military gear and oil — even suggesting those deals help bankroll the invasion of Ukraine.

“While India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world,” Trump wrote, before delivering the gut punch: “I don’t care what India does with Russia. They can take their dead economies down together, for all I care.”

That “dead economy” dig set off a political firestorm in India. Opposition leader Rahul Gandhi seized on Trump’s words like a gift from the heavens, hammering Modi for letting the country be “abused” on the world stage while botching trade negotiations. “The government has destroyed our economic policy, has destroyed our defence policy, has destroyed our foreign policy,” Gandhi said, accusing Modi of losing credibility abroad while failing to rally allies against Pakistan, even after April’s Kashmir massacre.

Modi’s BJP shot back, accusing Gandhi of “parroting foreign propaganda” and pointing out that India remains the world’s fastest-growing major economy, with the IMF and World Bank revising its growth projections upward. Even some of Gandhi’s allies weren’t comfortable with Trump’s “dead economy” label, calling it “arrogant” and “delusional.”

Behind the fiery rhetoric are real economic stakes. Analysts warn that Trump’s tariffs could gut Indian exports — with worst-case scenarios knocking as much as 40 basis points off growth by next year. Adding insult to injury, Pakistan just announced a trade deal with Washington that promises reduced tariffs and joint energy development, raising fears that India could lose ground to a key regional rival.

Treasury Secretary Scott Bessent summed up the White House frustration: India “came to the table early” for negotiations but “slow rolled” progress, all while remaining one of the biggest buyers of Russian oil. For Trump, that’s a nonstarter.

Modi’s dilemma? Agriculture. Nearly 40% of India’s workforce depends on it, and his government has fiercely protected domestic farmers from foreign competition. Yielding to U.S. demands would be politically radioactive at home, yet holding out risks tariffs that could cripple the economy.

If Modi wants back into Trump’s good graces, it may come down to one thing: ditching Russian oil. Indian state refiners have already cut back purchases, reportedly after NATO warnings of secondary sanctions. But the real test will be whether private Indian refiners — the bigger players — follow suit.

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