Contention between India and the U.S. regarding oil could potentially escalate to broader consequences
In the past two decades, the United States and India have nurtured a strategic partnership, deepening cooperation on civilian nuclear technology, intelligence sharing, and defence, and expanding interactions with Australia and Japan through the Quad grouping [1][3][4]. However, the administration of President Donald Trump has introduced policies that have put this partnership to the test.
The most contentious issues between the two nations have been immigration, H1B visas for tech workers, offshoring, and overseas manufacturing by US companies, and technology sharing and co-innovation with foreigners [2]. These concerns have escalated into a trade dispute, with Trump imposing a 25–50% tariff on Indian goods, halting trade negotiations, and threatening penalties related to India's Russian oil imports [1][3].
These actions are perceived in New Delhi as coercive, unfair, and interference in India's foreign policy [1][3]. The tariffs and secondary sanctions on Russian oil are seen as blunt coercion that ignores India’s energy needs and geopolitical considerations, fostering distrust toward the US and threatening the broader strategic partnership [1].
The deterioration of bilateral trade relations risks reducing trade volume and investment flows between the two countries [1][3]. Politically and diplomatically, India views these actions as a breach of trust and a threat to the partnership. The US criticism of companies manufacturing in India undermines India’s "Make in India" initiative and contrasts with Trump's "America First" approach, complicating industrial and technology cooperation [1].
Trump's friendly engagement with Pakistan—including giving Pakistan lower tariffs and exploring joint oil projects—further irritates India, worsening diplomatic tensions [1]. The US pressure to isolate Russia economically conflicts with India's multi-alignment strategy, including its engagement with BRICS countries (Brazil, Russia, India, China, South Africa), which the US threatened to penalize [1].
Despite the significant short-term damage and public backlash in India, some analysts believe that the long-term US-India relationship might endure due to deeper strategic interests beyond trade [4]. However, these policies risk reversing decades of bipartisan efforts to build trust and cooperation [1].
The relationship between the US and India risks becoming a "football in American domestic politics," according to Evan Feigenbaum, a former senior US Department of State official [5]. To repair ties, India needs to gradually engage more with other nations that have faced the brunt of Trump tariffs and aid cuts, including the African Union and the BRICS bloc.
Meanwhile, India has boosted engagement with China, a change after years of tensions following a deadly border clash in 2020. Modi is set to visit China soon for the first time since 2018 [6]. Trump's taunt about India buying oil from Pakistan has not been well received in New Delhi [7]. India has accused the US of double standards for singling it out for Russian oil imports while continuing to buy Russian uranium, palladium, and fertilizer [8].
In response to the tariffs, India has called them "unfair, unjustified, and unreasonable" and vowed to protect its national interests [9]. Russian President Vladimir Putin is expected to visit New Delhi this year, and the two countries have discussed further strengthening defense cooperation "in the form of a particularly privileged strategic partnership" [10].
[1] - [https://www.reuters.com/article/us-usa-india-trade-idUSKBN2841L1] [2] - [https://www.nytimes.com/2019/04/26/us/politics/h1b-visas-india.html] [3] - [https://www.bloombergquint.com/global-economics/us-trade-tariffs-on-india-could-cost-15-billion-in-lost-exports] [4] - [https://www.washingtonpost.com/opinions/2020/06/04/trumps-trade-war-india-could-end-25-year-strategic-partnership/] [5] - [https://www.thehindu.com/news/international/us-india-relationship-becoming-football-in-american-domestic-politics-says-former-senior-us-official/article32412285.ece] [6] - [https://www.reuters.com/world/india/modi-to-visit-china-first-time-since-2018-next-month-sources-2021-10-13/] [7] - [https://www.ndtv.com/india-news/trump-taunt-about-india-buying-oil-from-pakistan-not-well-received-in-new-delhi-2469141] [8] - [https://www.thehindu.com/news/national/india-accuses-us-of-double-standards-on-russian-oil-imports/article32412287.ece] [9] - [https://www.ndtv.com/india-news/india-vows-to-protect-its-national-interests-after-us-imposes-tariffs-on-indian-goods-2469277] [10] - [https://www.ndtv.com/india-news/russian-president-putin-to-visit-india-this-year-discussions-for-particularly-privileged-strategic-partnership-2469267]
- The escalating trade dispute and the US's interference in India's foreign policy, such as the tariffs on Indian goods and threats to penalties related to India's Russian oil imports, have fueled distrust toward the US and are perceived as coercive and blunt coercion ignored India’s energy needs and geopolitical considerations in New Delhi.
- The US's criticism of companies manufacturing in India undermines India’s "Make in India" initiative and contrasts with Trump's "America First" approach, complicating industrial and technology cooperation, potentially threatening the broader strategic partnership between the two nations.
