High-level US-India engagement in 2023 initially conveyed strong bilateral warmth, including a June 2023 state visit to the US and a White House meeting. Six months later, US trade policy shifted sharply: as of August 27 most Indian goods face a 50% tariff, and an additional 25% tariff targets India over purchases of Russian oil. Trade talks failed after an April US tariffs announcement, escalating tensions. Washington fears damage to regional Indo-Pacific strategy from the bilateral rift. India worries about the economic impact on its fast-growing economy. Analysts say US criticism of Indian protectionism is accurate but the US measures and rhetoric are harsh and politically damaging.
When Indian Prime Minister Narendra Modi made a state visit to the US in June 2023, the pomp and pageantry reflected how keen the US side was to promote the countries' strong ties. "I've long believed that the relationship between the United States and India will be one of the defining relationships of the 21st century," said then-President Joe Biden when welcoming Modi.
Six months later, the situation has changed dramatically. As of August 27, most Indian goods going into the US market now face a 50% tariff, one of the highest rates in the world. Tensions escalated swiftly after the US and India failed to strike an agreement during trade talks in the wake of Trump's major announcement of tariffs against trading partners in April. Matters got even worse when Trump announced an additional 25% tariff on India over its purchases of Russian oil.
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