Salil Tripathi
Few leaders are as good at marketing themselves as India’s Narendra Modi. Since his election as Prime Minister in 2014, he has projected himself as the builder of a stronger and more assertive India, claimed credit for its robust economic growth, and has blamed his predecessors when things went wrong. A generation of voters believe India’s growing stature on the world stage is because of him.
But then comes Donald Trump, the disruptor par excellence, who on Wednesday threatened staggering 50% tariffs on imports from the world’s fourth largest economy. India now faces among the steepest U.S. levies of any nation.
The announcement is a remarkable development considering the past bonhomie between the two men. Modi and Trump are populists with ideological similarities and had previously campaigned for each other. And this year, Modi became one of the first world leaders to visit the White House following Trump’s return to office in January. He called him a “great friend” during the February visit and the two pledged to double U.S.-India trade to $500 billion by 2030.
But trouble boiled over in late July, when Trump announced a 25% tariff on Indian goods, which he doubled on Wednesday. The U.S. President has zeroed in on India’s significant purchase of Russian oil as a deadline for Moscow to agree to a cease-fire in Ukraine looms.
The new tariffs—which come into force on Aug. 27—won’t necessarily protect U.S. markets or businesses. But they will punish a country that currently imports 36% of its oil from Russia, up from a mere 0.2% before the Kremlin’s full-scale invasion of Ukraine over three years ago. Much of this bargain oil is used for domestic consumption—India imports more than 80% of the oil it needs, and quickly finding another supplier will be neither easy nor cheap.
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