Countdown begins: PM Modi has 19 days to dodge Trump's 50% tariff shock. What are India's options?
INDIAN DEFENCE
The diplomatic and economic corridors of New Delhi are abuzz with urgency as Prime Minister Narendra Modi faces a ticking clock—just 19 days remain before U.S. President Donald Trump’s proposed 50% tariff on key Indian exports comes into force.
With global supply chains already rattled by geopolitical tensions, the looming tariff shock is not just an economic skirmish but a test of India’s strategic balancing act between Washington and Moscow. India’s decision-making is complicated by its need to maintain energy security, particularly discounted Russian oil imports, while preserving critical defence partnerships with Russia that supply over 60% of its military hardware. For the Modi government, the challenge is threading the diplomatic needle—appeasing Washington without abandoning the strategic autonomy that has long been the cornerstone of India’s foreign policy.
To avert this trade war escalation, India’s options span a range of diplomatic, economic, and strategic manoeuvres. On the negotiation front, backchannel talks with U.S. trade representatives could yield sector-specific exemptions or phased tariff rollouts, buying time for Indian exporters to adjust. India might also leverage its growing role in U.S.-led Indo-Pacific security frameworks, such as the Quad, to underline its strategic importance in countering Chinese influence—a point Washington may be unwilling to overlook. On the economic front, diversification of export markets, especially in Europe, ASEAN, and Africa, could help cushion the impact of U.S. tariffs, while targeted domestic incentives might offset revenue losses for vulnerable industries. In parallel, a calibrated reduction in visible Russian oil imports—perhaps balanced by increased purchases from Middle Eastern suppliers—could signal goodwill without dismantling India’s energy strategy. Yet, any such move must be weighed against the risk of alienating Moscow, a longstanding ally that continues to play a critical role in defence and energy security. As the clock winds down, the Modi government’s next steps will not just determine the immediate fate of India-U.S. trade relations but also shape the geopolitical positioning of the world’s fifth-largest economy in an era of shifting alliances and economic nationalism.
This potential move, framed as a retaliatory measure against India’s continued purchase of Russian energy and defence equipment, threatens to disrupt billions of dollars’ worth of trade flows between the two countries. The stakes are high: the United States is one of India’s largest trading partners, and any sharp tariff escalation could ripple across industries ranging from pharmaceuticals and textiles to IT services and engineering goods.