President Donald Trump has walked away from a potential trade deal with India, leaving economic ties between the two nations in limbo over unresolved tariff disagreements.
According to Politico, Trump initially hinted at progress with India in mid-July, stating, “We’re very close to India, and we could possibly make a deal with the EU.” However, his attention swiftly pivoted to the European Union, stalling talks with India despite their offer to reduce some of the world’s highest tariffs.
India’s proposal to lower certain trade barriers fell flat when compared to more aggressive offers from countries like Indonesia, which slashed rates to nearly zero. An administration official, speaking anonymously, revealed that Trump’s team found India’s concessions “totally insufficient” next to these bolder deals.
“The president was able to get a number of countries to go to zero, or close to zero in other cases,” the official noted. When stacked against such sweeping reductions, India’s partial rollback of tariffs didn’t cut it, exposing a gap in expectations.
Meanwhile, Indian officials hoped a direct conversation between Prime Minister Narendra Modi and Trump could salvage the deal. Yet, Modi, facing domestic political heat, dodged a call or meeting, wary of potential public criticism from Trump.
Mukesh Aghi, a commentator on U.S.-India relations, explained Modi’s hesitance: “He has projected himself, the prime minister, as a strong leader.” Aghi suggested Modi feared a verbal clash, preferring to avoid a situation where he’d need to push back against Trump’s blunt style.
Modi’s caution wasn’t unfounded, given Trump’s reputation for unfiltered exchanges with world leaders. Notably, the U.S. secured trade pacts with Japan and South Korea without leader-to-leader calls, a point Trump’s team emphasized as proof that such talks aren’t always necessary.
The Indian embassy in Washington stayed silent on the matter, offering no comment on the stalled negotiations. This reticence only deepened the uncertainty surrounding a potential resolution.
Meanwhile, the contrast in approach between India and other nations grew glaring. Countries willing to slash tariffs entirely gained Trump’s favor, while India’s halfway measures left it on the sidelines.
Adding fuel to the fire, Trump’s frustration with Russia over Ukraine spilled over to India, as he slapped an additional 25 percent tariff on the country for buying Russian oil. Last year alone, India purchased $52.7 billion worth of this oil, refining some for export to Europe.
India defended its actions, insisting these purchases are vital for its energy security. They’ve also pointed out a perceived double standard, noting that the EU, a major buyer of Russian gas, and Turkey, a key purchaser of Russian coal, escaped similar penalties.
This selective targeting has irked Indian officials, who feel unfairly singled out amid broader geopolitical tensions. It’s a bitter pill when global energy dynamics are already a tightrope walk for many nations.
Trump’s decision to scrap the deal underscores a hard truth: half-measures won’t win in a world where other players are all-in on trade concessions. India’s reluctance to fully open its markets, while understandable given domestic pressures, handed an easy win to competitors.
Modi’s sidestepping of direct dialogue, though politically savvy at home, may have cost India a chance to reset ties with a Trump administration that thrives on bold, personal deal-making. Without that face-to-face grit, the rift only widens.
In the end, this breakdown isn’t just about tariffs; it’s a signal of how fragile economic partnerships can be when trust and timing don’t align. India might rethink its stance down the line, but for now, Trump’s focus is elsewhere, and the door to a deal remains firmly shut.
