From trust to tariffs

If both sides harden positions on tariffs, Sergio Gor's assignment in Delhi as US ambassador could become a baptism by fire

- Harsh V Pant Vivek Mishra

Few had anticipated six months ago that the India-US relationship would encounter the kind of turbulence it has in recent months. Expectations of unpredictability were always high with Donald Trump's return to the White House for a second term. Yet the scale and immediacy of economic friction have caught many by surprise. The relationship, which has matured steadily over two decades, now faces one of its most severe economic challenges in recent times.

It is important to distinguish between the political and economic dimensions of the bilateral dynamic. Politically, the relationship remains relatively stable. Both recognise their shared stakes in the Indo-Pacific, counterterrorism, and the rise of disruptive technologies. Economically, however, the picture is far more complex. While some argue that direct dialogue between leaders can resolve most disagreements, this view overlooks the fact that the present turbulence is rooted in an economic clash where the Trump administration has drawn firm red lines.

With tariffs of up to 50% on Indian goods imposed by the Trump administration taking effect on Thursday, a sense of unease has settled in New Delhi. What began as a tactical trade dispute has evolved into a deeper impasse, with both sides signalling an unwillingness to back down easily. The tariffs, aimed largely at sectors such as pharmaceuticals, textiles, and certain categories of agricultural goods, represent a direct challenge to India's export competitiveness. For New Delhi, the fear is not only the immediate economic cost but also the precedent it sets for future protectionist moves by Washington.