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Trump has repeatedly leveraged steep tariff threats as a tool of economic coercion to pressure New Delhi. How has India battled it? News18 explains
US President Donald Trump (News18 Media Gallery)
In his second term, US President Donald Trump has repeatedly leveraged steep tariff threats as a tool of economic coercion to pressure India over its independent foreign policy and its continued procurement of Russian crude oil.
To handle Trump’s aggressive and repeated tariff pressure, India has moved beyond retaliatory trade measures. New Delhi has engineered a resilient defense playbook combining unyielding energy sovereignty, legal relief, calculated trade concessions, and supply chain adjustments.
All you need to know.
TRUMP’S TARIFF THREATS AND WHAT HAPPENED NEXT
July–August 2025: The 50% “Russian Oil” Penalty Tariff
In July 2025, after months of trade negotiations, Trump unexpectedly announced a 25% baseline tariff on Indian exports. He cited India’s high duties and “obnoxious non-monetary trade barriers”. Days later, on August 6, 2025, he signed an executive order slapping an additional 25% penalty tariff, bringing the total to 50%.
Trump explicitly lashed out at India for being Russia’s largest buyer of energy, accusing New Delhi of “fueling the war machine” in Ukraine.
What Happened Next?
India’s Ministry of External Affairs (MEA) slammed the move as “unfair, unjustified, and unreasonable”. New Delhi refused to stop buying Russian oil, stating that energy security for its 1.4 billion people was paramount.
The 50% levy caused widespread cancellation of export orders, hammering labor-intensive Indian sectors like textiles, gems, jewelry, and seafood. To weather the storm, India ramped up trade agreements with the European Union and strengthened ties with alternative markets. By late 2025, India’s Russian oil imports fell to a 38-month low.
February 2026: The $500 Billion Interim Trade Deal
On February 2, 2026, President Trump and Prime Minister Narendra Modi reached an interim breakthrough during a phone call. Trump announced that the US would slash tariffs to 18%.
Trump claimed via Truth Social that Modi agreed to stop buying Russian oil and commit to buying over $500 billion worth of American goods (energy, tech, agriculture).
What Happened Next?
New Delhi only officially acknowledged the tariff reduction and a generalized goal to hit $500 billion in trade by 2030, remaining tight-lipped about a full halt on Russian energy. Days later, the US Supreme Court ruled 6–3 that certain broad emergency tariff powers were invalid. Trump immediately bypassed this by using Section 122 of the Trade Act of 1974 to lock in a baseline 10% tariff, using trade pact terms to dictate final rates.
March–April 2026: The Iran War Crisis & US U-Turn
In early 2026, military conflicts involving the US, Israel, and Iran led to an Iranian blockade of the Strait of Hormuz. Global oil prices skyrocketed, creating a massive energy supply crunch.
What Happened Next?
Facing inflation at home, Washington completely flipped its stance. The Trump administration issued temporary exemptions allowing India and other nations to purchase stranded Russian and Iranian oil to stabilize global markets. Consequently, India’s imports of Russian crude spiked right back up, hitting an 11-month high by April 2026.
September 2026: The 100% Tariff Legislative Weapon
Following the expiration of the temporary energy waivers, Washington has revived its aggressive pressure tactics. On September 16, 2026, the US House of Representatives passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026.
The bill authorizes the President to impose tariffs of up to 100% on the largest importers of Russian energy. While an amendment explicitly naming India was removed in the final draft, the country remains a prime target as one of Russia’s primary crude buyers. Rumours inside Washington have even floated potential penalty caps of up to 500%.
What next?
India’s MEA has once again doubled down on its strategic autonomy. On September 17, 2026, the government stated it has “noted” the US bill but will take all necessary actions to guarantee national energy security.
Experts warn that if signed into law, a 100% tariff would heavily damage India’s trade balance and rupee value. To mitigate this, domestic trade bodies like the Global Trade Research Initiative (GTRI) have advised New Delhi to hold firm and avoid making unilateral concessions to Washington.
INDIA’S TRADE DEFENCE PLAYBOOK
Prioritizing Sovereign Energy Security Over Threats: Despite escalating pressure—culminating in the recent passage of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 giving Trump up to 100% tariff authority—India has flatly refused to compromise on its domestic energy needs.
The Ministry of External Affairs (MEA) consistently deploys a firm, “Nation First” narrative. New Delhi states that securing affordable fuel for 1.4 billion citizens is a non-negotiable national duty.
When Trump initially slapped India with a combined 50% tariff in August 2025, India hit back publicly. The MEA exposed the double standards of Western nations that preach free markets while penalising developing economies for buying discounted crude, say experts.
Waiting Out Waves via Judicial Relief & Market Volatility: India successfully utilized internal American legal systems and global economic shifts to blunt Trump’s executive actions.
When Trump’s broad tariffs under the International Emergency Economic Powers Act (IEEPA) were struck down by the US Supreme Court in 2026, India gained immediate economic breathing room. It transitioned seamlessly to navigating Trump’s scaled-back, temporary 10% global replacement tariff. During the early 2026 Middle East shipping crisis, India demonstrated that cutting off its access to Russian oil would trigger a severe energy shortfall, driving up US inflation. This structural reality forced Washington to issue temporary waivers, during which India promptly pushed its Russian oil imports back to an 11-month high by April 2026, say experts.
Strategic Concessions and De-escalation Frameworks: Recognizing Trump’s transactional approach to diplomacy, India has selectively offered reciprocal trade cuts to protect its wider economic interests:
India unilaterally slashed its high duties on iconic American imports like Harley-Davidson motorcycles and bourbon to defuse immediate baseline trade wars. In February 2026, Prime Minister Narendra Modi negotiated an interim framework to lower tariffs to 18%. India pacified Washington by pledging a joint target to scale bilateral trade to $500 billion by 2030 through increased procurement of US agricultural goods, tech, and American energy, say experts.
Insulation via Free Trade Pacts and Product Exemptions: To shield local manufacturers from total dependence on the US consumer market, India has aggressively hedged its export risk. India fast-tracked and signed major free trade agreements (FTAs) with alternative economic blocs—including Oman, the UK, and progress with the European Union—ensuring Indian exporters have duty-free avenues elsewhere.
When baseline tariffs hit, Indian trade ministries expertly restructured export channels. By mid-2026, 45% of all Indian goods entering the US were successfully shifted into categories legally exempt from Trump’s emergency duties, according to experts.
With agency inputs
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Ask News18Following the expiration of temporary energy waivers, Washington revived its pressure tactics by passing the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 to authorize tariffs of up to 100% on major importers of Russian energy.
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