India-US Trade Tensions: India Hits Back at EU & U.S. Over Russia Trade Amid Trump’s Tariff Threats
In
recent weeks, tensions have been escalating between India and the United States
over trade issues, particularly with Russia's trade relationship with
India. This has come amid threats from President Trump to impose tariffs on
Indian goods. In response, India has taken a stand, hitting back at both the EU
and the U.S. India doesn't seem to be pleased with US President Donald
Trump's 25% tariff on India, threats of further levies, further penalties, and
taunts that India is a "dead economy." In addition to claiming that
India is a "bright spot" in the global economic landscape, the Indian
administration is denouncing the duplicity of Western nations such as the US
and the EU about their oil trade with Russia. As far as the bilateral trade
between the US and India is concerned, the total trade between the US and India
reached $132.98 billion in 2024 and $39.1 billion in
the first quarter of 2025, as per the US export data and India-US
trade relations. Let's delve deeper into this complex trade situation of the
US-India trade tensions, why India Hits Back at EU & US Over Russia Trade,
and its impact on the global trade data in 2025.
Understandingthe Background of India-US Trade Tensions
Trump
referred to Russia and India as "dead economies" after enacting a 25%
tariff on the country last week. Given the continued supply of Russian crude,
Trump's pressure efforts to compel India to stop purchasing oil from Russia
don't appear to be working. India is attempting to mitigate the effects
of the US 25% tax on Indian exports to the US. The government is
preparing a plan worth Rs 20,000 crore, and efforts are on to promote domestic
brands.
Impactof Russia-India Trade on India-US Relations
India
has a long-standing trade relationship with Russia, particularly in the defense
sector, as per the customs data on Russia exports to India. This
has been a point of contention for the U.S., which sees Russia as a strategic
adversary. The U.S. has been pressuring India to reduce its dependence on
Russian defense equipment and instead purchase more American-made goods.
However, India has pushed back against these demands, arguing that its defense
ties with Russia are crucial for its national security interests.
President
Trump's administration has been vocal about its desire to reduce the U.S. trade
deficit with India and has threatened to impose tariffs on Indian goods if the
issue is not resolved. This has added another layer of complexity to the trade
tensions between the two countries, which could further complicate the US
imports from India.
India’sResponse to the U.S. and the EU
Pushing
Back Against Tariff Threats
In
response to Trump’s tariff threats, India has made it clear that it will not be
bullied into submission. Indian officials have stated that they are open to
dialogue and negotiation, but will not hesitate to retaliate if tariffs are
imposed on Indian goods.
Strengthening
Ties with the EU
India
has also reached out to the European Union as a counterbalance to the U.S. This
move is aimed at reducing India's dependence on the U.S. market and
diversifying its trade partnerships. Strengthening ties with the EU could also
help India in its negotiations with the U.S., giving it more leverage in trade
talks.
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