Economic coercion, not diplomacy
On August 6, 2025, President Donald Trump signed an executive order doubling tariffs on Indian goods to 50%—a drastic move. His justification? India’s continued imports of Russian oil, which he claims fuel Putin’s war machine.
But this isn’t about oil. It’s about pressure. Once again, the US is weaponizing trade, twisting alliances, and trying to strong-arm a sovereign new Bharat for making independent choices. This is economic coercion—Dadagiri—disguised as diplomacy.
When a journalist asked Trump why the US continues importing uranium hexafluoride, fertilizers, and chemicals from Russia, his response was: “I don’t know anything about it. I’ll have to check.” The double standard is clear—and troubling.
Let’s be clear: this tariff move is not a policy decision; it’s a power play. India is being penalized for asserting its strategic autonomy. As Bharat rises geopolitically and economically, America appears less like a partner and more like a jealous gatekeeper. This is not friendship—it’s conditional allegiance.
A betrayal of strategic partnership
Trump once called Modi “a great man” and hailed India as a key ally. Yet, the moment Bharat resists American pressure, that camaraderie vanishes. This tariff hike is not just an economic blow; it’s a diplomatic insult.
The message from Washington is blunt: align with us, or face consequences.
Modi’s moment of leadership
Now, Prime Minister Modi must demonstrate that Bharat will not be bullied.
Opposition leaders are already criticizing the government for “mismanaging” ties with the US. Exporters are rattled. Corporate boardrooms are anxious. But Modi must resist panic and remain steady.
Giving in, especially by opening Bharat’s agriculture and dairy sectors to US imports, would be disastrous. These are not just industries; they are the backbone of rural India. They employ hundreds of millions and are intertwined with cultural and religious values.
Trump’s push to allow US dairy—seen as “non-vegetarian” in Indian media—is deeply offensive to many Indians. Modi must draw a firm line: these sectors are off-limits.
This is a test not just of economic policy but of national dignity.
Economic stakes
India exports over $80 billion worth of goods to the US, mostly in labor-intensive sectors like textiles and electronics. Analysts estimate the new tariffs could slash exports by tens of billions and cut GDP growth by up to 0.6%.
MSMEs, which contribute over half of India’s US exports, will be hit hardest, facing canceled orders, layoffs, and rising costs. This risks shaking the very foundation of India’s export-led recovery.
But instead of retreating, India must seize this moment. Business leaders, such as Anand Mahindra, have called for domestic reform and greater self-reliance. This is the right path.
Beyond economics: A strained relationship
The damage won’t stop at trade. This aggressive move could fracture the broader US–India relationship, built over years of shared democratic values and defence cooperation.
Indian students—the second-largest international group in the US—are already turning to Canada, the UK, and Australia due to rising visa uncertainty. H-1B professionals are beginning to feel unwelcome. The perception is growing that Indians are now being treated as expendable.
Trump may ignore it, but the long-term damage to goodwill, talent exchange, and strategic alignment will be far greater than any trade imbalance.
The hypocrisy of “reciprocal trade”
While preaching democracy and rules-based order, the US is using sanctions, the dollar, and market access as tools of intimidation. This isn’t “reciprocal trade”—this is unprecedented economic bullying by America.
Bharat must play a long game
Bharat may face short-term pain, but so will America. And new and rising Bharat today is no pushover. It’s the fastest-growing economy on track to become the third largest, a tech powerhouse, and a key geopolitical player.
Bharat must diversify trade, deepen regional ties, and assert its strategic autonomy. The world must know: respect cannot be demanded through threats. It must be earned and asserted through resilience.
Modi must stand tall
This is a defining moment for Prime Minister Modi. He must protect not just Bharat’s economic interests, but its dignity. Bowing now will invite more pressure later. Standing firm will reaffirm Bharat’s rise, not only as a strategic and valuable partner, but as a sovereign equal.
Bharat deserves no less. With firm diplomacy and patience, even Trump may reverse course, as he has for others. But only if the new Bharat under Modi stands tall.
Note:
1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.
3. The author acknowledges the use of ChatGPT in researching topics and the meaningful improvement of content.
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Formerly, a researcher in Italy, Japan, and France, he has widely travelled and came to the US in 1978. He was a faculty and academic administrator in several different universities in PA, TX, NJ, MN, WI, and NY, and an Executive Fellow in the White House S&T Policy during the Clinton administration.
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