It looks like President Donald Trump is set to dig his heels in when it comes to dealing with India. The U.S. National Economic Council Director Kevin Hassett said President Trump is not likely to change his mind either: “… if the Indians don’t budge, I don’t think President Trump will.”
The trade relationship between the United States and India has deteriorated sharply, triggering one of the most serious economic and diplomatic confrontations between the two nations in decades. The conflict began when the U.S., under the Trump administration, imposed a 25% reciprocal tariff on a wide range of Indian exports, targeting key industries such as textiles, gems, seafood, and electronics. This was soon followed by a second 25% penalty tariff as retaliation for India’s continued energy imports from Russia, effectively bringing the total tariff burden to 50% on affected goods.
READ: Who lost India? Trump’s tariff approach puts a generation of U.S.-India progress at risk (
Speaking to the media at the White House on Wednesday, Hassett also furthered the U.S. argument that the 25% “penal” tariff on India over its purchase of Russian oil — in addition to the 25% that kicked in three weeks earlier — was a pressure move to get Russian President Vladimir Putin to stop the war in Ukraine.
The impact on India’s export-driven sectors has been immediate and severe. Nearly two-thirds of Indian exports to the U.S., worth over $40 billion, are now subject to elevated tariffs. Small and medium-sized exporters have been hit the hardest. Global financial institutions, including Goldman Sachs and S&P, have revised India’s economic forecasts downward, warning of a potential drop in GDP growth below 6.2% in FY26.
Beyond economics, the tariffs have sparked a major diplomatic rift. India has condemned the U.S. actions as unfair and politically motivated, arguing that its energy dealings with Russia are based on national interest, not defiance of alliances. Washington, however, framed the penalties as necessary for national security and foreign policy consistency.
“Part of it has been tied to the pressure we’ve been trying to put on Russia in order to secure a peace deal and save millions of lives. And then there’s the Indian intransigence about opening their markets to our products,” Hassett was quoted as saying by ANI.
Reacting to the doubling of duties on its exports to the U.S., India had hit back, pointing out how it was being punished for “actions that several other countries are also taking in their own national interest.”
The tensions have also led to domestic political backlash within India. Opposition leaders and industry bodies have called for retaliatory tariffs on American goods and consumer boycotts. Meanwhile, Indian officials are working to diversify trade partnerships and reduce dependence on U.S. markets.
This conflict threatens the broader strategic alignment between the two nations, particularly in the Indo-Pacific region. Unless cooler diplomatic heads prevail, the fallout could reshape not only the U.S.–India trade but the future of global economic alliances.