Former US President Donald Trump has indicated a potential return to aggressive trade policies targeting India if he wins the upcoming presidential election, specifically citing New Delhi's continued purchases of Russian oil as a key point of contention. In a recent interview, Trump suggested that imposing new tariffs on India was a likely course of action, emphasizing that it was "important to make me happy."
Trump's Displeasure and Direct Message to Modi
Trump revealed that he had directly communicated his dissatisfaction to Prime Minister Narendra Modi regarding India's energy dealings with Russia. "I think he's [Modi] great, but I told him, you have to do better," Trump stated, referencing conversations held during his presidency. He claimed that PM Modi was fully aware that he was "not happy" with India buying substantial volumes of Russian crude oil, a practice that has continued and even expanded following Russia's invasion of Ukraine in February 2022.
The former president framed the issue in personal terms, suggesting that maintaining a positive relationship with him was crucial for favorable trade terms. His comments underscore a transactional approach to international diplomacy, where economic concessions are linked to personal rapport.
Historical Context: Tariffs and Trade Threats
This is not the first time Trump has threatened India with trade measures. During his term from 2017 to 2021, his administration:
- Removed India from the Generalized System of Preferences (GSP) trade program in 2019, which had allowed billions of dollars worth of Indian exports to enter the US duty-free.
- Engaged in tense negotiations over issues like price caps on medical devices (e.g., stents and knee implants) and India's digital services tax.
- Frequently criticized India's high tariffs on American products like motorcycles and whiskey.
Trump's latest remarks signal a possible escalation, with new, targeted tariffs specifically over the Russian oil issue being floated as a primary tool. He positioned this action as a matter of fairness, arguing that other allies who ceased buying Russian oil deserved more favorable treatment compared to those who did not.
Implications for India-US Relations and Global Trade
The potential revival of such trade pressures poses significant challenges for India-US relations, which have otherwise strengthened strategically in recent years. India has defended its oil imports from Russia as a necessary step to control domestic inflation and ensure energy security for its growing economy, especially given the volatile global oil prices.
Analysts suggest that a second Trump term could see a renewed focus on bilateral trade deficits and a more unilateral, protectionist stance. This could impact various sectors of the Indian economy beyond energy, including textiles, engineering goods, and pharmaceuticals. The threat also comes at a time when the US is seeking to deepen ties with India as a counterbalance to China in the Indo-Pacific region, creating a complex dichotomy between strategic partnership and trade disputes.
Furthermore, Trump's comments highlight the ongoing global dilemma stemming from the Ukraine war. While Western nations have imposed sanctions and sought to limit Russia's energy revenue, major economies like India and China have capitalized on discounted Russian crude, reshaping global oil trade flows and creating new geopolitical friction points.
The final outcome hinges on the result of the November 2024 US presidential election. If Trump returns to office, his administration's trade policy toward India will be a critical early indicator of whether strategic convergence can outweigh economic disagreements, or if a new phase of tariff-driven tensions will define the bilateral relationship.
