The trade relationship between India and the United States has sharply deteriorated, following a stern rebuke from U.S. President Donald Trump, who described it as “a totally one sided disaster.” His comments came shortly after Indian Prime Minister Narendra Modi’s visit to China for the Shanghai Cooperation Organisation (SCO) summit.
On his platform Truth Social, Trump criticised India’s high tariffs on American exports and noted that while India offered to reduce tariffs to zero, “it is getting late” and “they should have done so years ago.” The exact timing of this offer remains unclear.
This tension arises amid the U.S. decision to impose a 50% tariff on a broad range of Indian goods as of August 2025. These tariffs, a response to India’s continued import of Russian oil, were labelled “unfair, unjustified and unreasonable” by Indian officials. The levies affect industries such as textiles, gems, jewellery, footwear, shrimp, and leather, while exempting pharmaceuticals and electronics.
Trade data from 2024 shows India holds an important trade surplus with the U.S., exporting nearly $87.3 billion worth of goods while importing $41.5 billion. Total trade including services stands at about $212 billion yearly.
Trump emphasised that India continues to buy oil and military equipment from Russia while exporting “massive amounts of goods” to America and imposing what he describes as the highest tariffs on U.S. businesses, making it “a totally one sided disaster!”
Peter Navarro, Trump’s trade adviser, also criticised Modi’s balancing between Moscow and Beijing. On Fox News, Navarro said, “I don’t understand how the Indian leader is cooperating with Russian President Vladimir Putin and Chinese President Xi Jinping ‘when he’s the biggest democracy in the world’.”
Bilateral trade talks aimed at reciprocal tariff reductions stalled, with disagreements over India’s Russian oil imports and tariff cuts. Indian officials have suggested no immediate retaliation despite the U.S. tariffs.
Meanwhile, Modi met Xi Jinping at the SCO summit, where both leaders underscored their intention to be “partners, not rivals.” Some analysts argue U.S. tariffs may be accelerating closer Indo-Chinese ties.
U.S. Treasury Secretary Scott Bessent described the SCO summit as “performative,” downplaying concerns about growing India-China ties amid American tariffs.