From ‘friend’ to ‘dead’ economy: How did India and the US get here?

Friend, foe or frenemy… How should India describe US President Donald Trump?

It’s a huge conundrum that New Delhi faces as the US president has dropped a new bombshell; he declared on Truth Social, “I don’t care what India does with Russia. They can take their dead economies down together, for all I care.”

The explosive remark coincides with the US Department of State sanctioning six Indian oil companies for “engaging in Iranian petroleum, petroleum products, or petrochemical trade”. It also comes a day after Donald Trump announced 25 per cent tariffs on imports from India.

The US president’s harsh remarks are quite a reversal from before — he has referred to India as a ‘friend’ in the past.

‘Take their dead economies down together’

In one of his most fiery posts on Truth Social, Donald Trump on Thursday (July 31) unleashed a blistering tirade against New Delhi’s ties with Moscow, calling both nations “
dead economies” and brazenly declaring he “does not care” what India does with Russia.

“I don’t care what India does with Russia. They can take their dead economies down together, for all I care,” he wrote, just hours after Washington’s move to slap 25 per cent duties, effective August 1.

In the same post, he called out India, saying: We have done very little business with India; their tariffs are too high, among the highest in the world.”

Trump also issued a warning to former Russian President Dmitry Medvedev to “watch his words” and avoid entering “very dangerous territory”. “Let’s keep it that way, and tell Medvedev, the failed former president of Russia, who thinks he’s still president, to watch his words. He’s entering very dangerous territory,” he added.

Trump slaps 25 per cent tariff on ‘friend’ India

Trump’s blistering remark on India comes a day after he announced that the US would be levying a
25 per cent tariff as well as a
“Russian penalty” on New Delhi.

“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country,” Trump said, adding that the US has a “massive” trade deficit with India.

He also disapproved of New Delhi’s defence deals with Moscow, saying India has “always bought a vast majority of their military equipment from Russia”. They “are Russia’s largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine.”

Trump’s announcement comes after India and the US have held five rounds of trade negotiations but yet to yield a result, dashing hopes that a deal could be concluded by August 1.

US sanctions six Indian oil companies

What’s even more interesting is that the US State Department has sanctioned
six oil companies, accusing them of importing and marketing Iranian petroleum and petrochemical products. “These companies have collectively imported tens of millions of dollars’ worth of Iranian-origin petrochemicals,” the State Department said, adding that such transactions “generate billions of dollars in illicit funds for Iran’s destabilising activities.”

According to an ANI report, the companies to be sanctioned are: Alchemical Solutions Private Limited, Global Industrial Chemicals Limited, Jupiter Dye Chem Private Limited, Ramniklal S Gosalia and Company, Persistent Petrochem Private Limited and Kanchan Polymers.

US-Indo trade deal ‘very close’ but yet so far

Notably, the announcement of a 25 per cent tariff and a ‘Russian penalty’ comes as Indian and US officials continue to hammer out a
trade deal, which has been ongoing since February.

In fact, in early July, US Treasury Secretary Bessent said that an India-US deal is “very close” in an interview to Fox News.

His comments came hours after White House Press Secretary Karoline Leavitt said the two nations would “very soon” conclude the agreement, and that US President Donald Trump would make an announcement regarding the finalisation of the pact.

“Yes, he said that week and it remains true. I actually spoke to our secretary of commerce about it. He was in the Oval Office with the President. They are finalising these agreements, and you’ll hear from the President and his trade team very soon when it comes to India,” Leavitt said.

These comments were echoed by India’s Commerce Minister Piyush Goyal, who said that the country is making “fantastic’ progress in trade talks with the United States. “We’re making fantastic progress with the United States, and I do hope we’ll be able to conclude a very consequential partnership,” Goyal was quoted by Reuters.

However, it seems that the talks were stalled owing to differences over tariffs in
dairy and agriculture, two sectors where India has high import barriers. In an interview Finance Minister Nirmala Sitharaman had even said agriculture and dairy were the two “big red lines,” and that the government wouldn’t do anything that would “weaken our farmers’ positions”.

Beginning of India-US trade deal

It was in early April following Trump’s
‘Liberation Day’ announcement through which New Delhi would be levied with a 26 per cent tariff that India and the US began talks to hammer out a trade deal, which would be beneficial to both countries. As part of early discussions, New Delhi offered to reduce tariffs on select US exports, including motorcycles (Harley-Davidson), whiskey, network and IT hardware.

Moreover, India proposed a “zero-duty” treatment on certain strategic imports under PLI (Production Linked Incentive) schemes. Also, a “forward MFN” clause, which means if India gives better terms to another country in the future, the US gets the same benefits.

Modi’s US visit

But all of this can be traced back to Prime Minister Narendra Modi’s visit to the United States in February — he was one of the first world leaders to visit Trump after his inauguration.

At that meet, the two leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) this year, and to double bilateral trade between the two countries from the current $200 billion-level to $500 billion by 2030.

What was notable, however, was that hours before meeting Modi, Trump announced plans to impose
reciprocal tariffs on all US trading partners, including India, “to restore fairness in US trade relationships” and correct “long-standing imbalances” in international trade.

Trump accuses India of being a ‘tariff king’

In the past too, the US president has slammed India for its tariff policy. While campaigning to be US president in October 2024 said, “The biggest charger of all is India. India is a very big charger. We have a great relationship with India. I did. And especially the leader, [Prime Minister Narendra] Modi. He’s a great leader. Great man. Really is a great man. He’s brought it together. He’s done a great job. I mean, I think they probably charge more than, in many ways, China. But they do it with a smile. They do it… Sort of a nicer charge. They said thank you so much for purchasing from India.”

Prior to that, in 2018, Trump in his first term had said, “India, which is the tariff king, they called us and they said, ‘we want to start negotiations immediately’.”

With inputs from agencies