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How India Can Deal With Trump And His Tariffs ‘Creatively’

KANIKA SINGH RATHORE, 29/01/202529/01/2025

Colombian President Gustavo Petro became the first major casualty of Trump 2.0’s no-nonsense approach—some might argue, his unchecked ire. The US President wasted no time in showing the world that his recent fiery rhetoric wasn’t just for show.

The Columbian President tried to go toe-to-toe with the world’s most powerful man. First, Petro made a show of defiance, refusing to allow US military planes carrying illegal Colombian immigrants to land on his turf. He even lobbed a couple of undiplomatic words at him, calling Trump a “white-slaver” allegedly bent on “wiping out the human species”. Subtlety was clearly missing. And when Trump fired back with a threat of 25% tariffs on Colombian goods, Petro, trying to punch above his weight, promised to counter with 50%.

National Hero To Humiliation

So far so good. But just hours after posting his defiant salvos on X, Petro folded faster than anyone could imagine. To everyone’s surprise, he agreed to take back his undocumented citizens—on US terms. That meant they would be sent on military planes, shackled and handcuffed. If you are feeling charitable, you might spin this as both sides “reaching a resolution”. But the truth is that Petro got steamrolled. He went from being a national hero to national humiliation in record time. One moment, he was the fearless leader standing up to the world’s most powerful country; the next, he was the guy who caved in, leaving his critics and supporters alike cringing.

The lesson is that going toe-to-toe with Trump may create a good spectacle, but in practice, it might just leave you wounded and scarred.  At the end of the fiery spectacle, a smug White House issued what can only be described as a global warning with menace: “Today’s events make clear to the world that America is respected again.” The message was that if you crossed Trump, you might just find yourself on the receiving end of his “America First” doctrine.

‘Tremendous Tariff-Makers’

Trump wasted no time flexing his muscles either. He has been openly critical of India. Barely a week into his second term, he lumped India, China and Brazil into the “tremendous tariff-makers” club—essentially rebranding his friends and foes from the first term into a single category of troublemakers. The man who once rolled out the red carpet for “Howdy, Modi!” now seems more inclined to roll out the tariff charts.

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Interestingly, while he’s been busy berating EU countries and throwing shade at NATO, one country remains conspicuously untouched: Britain. In fact, he went out of his way to heap praise on Prime Minister Keir Starmer—for reasons no one seems able to pinpoint. What’s next? One wonders why the same generosity of spirit couldn’t extend to India, especially after the spectacle of mutual adoration during Modi’s US visits in his first term.

Trump’s unpredictable style and transactional worldview seem poised to complicate Washington’s relationship with New Delhi. There is no re-election bid this time to temper the impulses of an unfiltered, unrestrained Trump.  If his recent moves are any indication, his second term might see less fanfare and more hardball. And for India, navigating these waters may require more than just charm and photo ops—it’ll demand some serious diplomatic footwork. 

‘America First’ vs ‘Make In India’ 

If Trump has made “America First” his battle cry, India has long sworn by its own foreign policy doctrine—strategic autonomy. A doctrine that, in theory, allows New Delhi to chart its own course without bending to external pressures. But theory and reality, as history reminds us, don’t always shake hands. Since COVID-19, nations—including India—have doubled down on domestic markets, expanded production bases and vowed to build supply chains as resilient as their political speeches claim them to be. But now, the world is faced with a resurgent America under Trump 2.0, whose zero tolerance for global balancing acts is well documented. Will India hold its ground, or will the weight of tariffs, trade imbalances and immigration disputes force it to “adjust”? 

India A ‘Tariff King’?

Do not forget, Trump has previously described India as the “tariff king”, highlighting what he viewed as excessively high import duties on US products. Examples of high tariffs, furnished by the US side to back their complaints, are as follows: 

  • Agriculture: tariffs on almonds (17%) and apples (70%)
  • Luxury goods: India’s 150% tariff on imported alcoholic beverages like bourbon whiskey
  • Technology: India imposes high duties on high-end electronic goods, such as iPhones and laptops
  • High-end motorcycles: India has imposed tariffs as high as 100% on luxury motorcycles, including those from Harley-Davidson—a frequent talking point for Trump in his first term
  • Medical Devices: India’s price caps on imported medical devices, like stents, have drawn criticism from US manufacturers
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Trump could push for sweeping tariff reductions or reciprocal measures. He may also threaten retaliatory tariffs on Indian exports if there’s no progress. 

Clues From Trump 1.0

Trade relations under Trump’s first term were, at best, a mixed bag. While bilateral trade grew, tensions over tariffs and market access simmered. I recall how in 2019, Trump’s abrupt withdrawal of the benefits India enjoyed under the Generalized System of Preferences (GSP) dealt a significant blow to relations. It highlighted his administration’s tough stance on trade imbalances. I reckon under the current Trump rein, trade negotiations would likely remain contentious, with the US pushing for greater access to Indian markets, particularly in agriculture, dairy, and e-commerce

India, on its part, has every right to protect its domestic industries while expanding exports in sectors like pharmaceuticals, IT services and textiles. If Trump has based his foreign policy on “America First”, Modi’s doctrine is “Make in India”. 

Indian Immigrants

Trump’s hardline stance on immigration is unsettling for many countries, including India. There are reports of India preparing to agree to take back under 20,000 of its undocumented citizens in the US. However, according to 2022 official data, with 7,25,000 illegal immigrants, India has the second-highest number of undocumented citizens in America after its neighbour, Mexico. Trump could demand that India accept a significant portion of these citizens. His focus on this issue might intensify, especially given his previous emphasis on cracking down on immigration from non-European countries. 

Accepting large numbers of deportees would be politically sensitive in India. On the other hand, refusing or delaying cooperation might lead to strained relations, with Trump potentially leveraging other areas, like trade or visa policies, as bargaining chips. Big trouble is brewing on this issue.

Trade And Trump’s Zero-Tolerance

In 2022, bilateral trade in goods and services between India and the US reached $191.8 billion, with India enjoying a trade surplus of $45.7 billion. Trump’s administration will likely push hard to correct this imbalance, testing India’s diplomatic and economic strategies. With the US being India’s largest export market, how will New Delhi balance its interests and leverage its position? A tough call indeed. 

Trade deficit in general is an irksome issue for Trump. The US trade deficit against India, though much less than that against China, remains a big worry for his administration. Trump after all had singled out Canada for their trade imbalance and threatened to make it America’s 51st state. Will he target India with higher tariffs or demand renegotiations of trade terms? In my view, Trump is likely to demand greater access to US goods and services in India.

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India, in turn, could face pressure to lower tariffs on several products, risking backlash from domestic industries that benefit from protectionist policies. Trump may also demand concessions on e-commerce regulations, data localisation requirements and government procurement policies.

Win Some, Lose Some

There’s, however, always room to manoeuvre—at least between Trump’s ‘highway’ and his ‘my way’. Take the H-1B visa programme, a lifeline for India’s IT sector and a constant thorn in Trump’s ‘America First’ rhetoric. With Indians making up over 70% of H-1B recipients, any attempt to tighten eligibility, limit extensions, or increase fees would hit Indian professionals hard. Trump has never been shy about targeting H-1Bs, arguing they steal jobs from American workers. This time, his administration could be even more aggressive.

And then there are the students—over 200,000 Indians currently studying in the US, pumping billions into American universities. Trump might not explicitly go after them, but higher visa fees, post-study work restrictions, or broader immigration crackdowns could make life much harder. Of course, there’s always the chance he may use them as bargaining chips—after all, everything’s a deal in Trump’s world.

India’s Game

So what could be India’s play? Strategic autonomy must be preserved, yes, but in practice, the Ministry of External Affairs may have to become more creative, agile and engaging. To start with, India’s ambassador must be someone with contacts in the corridors of power and a person who can extensively promote India’s interests. India could also leverage its Indo-Pacific importance, remind Washington that it remains a crucial counterweight to China and—let’s be honest—make a few concessions. Opening up key sectors like retail, e-commerce, or defence to US firms might just buy India some breathing room.

Meanwhile, working the backchannels—Indian-origin officials in Trump’s administration, pro-India lawmakers, corporate allies—might help soften the blows. India has a very delicate path to walk for the next four years. 

(Syed Zubair Ahmed is a London-based senior Indian journalist with three decades of experience with the Western media)

Disclaimer: These are the personal opinions of the author

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