Who is actually “Fueling The War Machine”
Beyond Russian Oil: What’s Really Driving U.S. Tariffs on
India?
In a sudden and forceful escalation of trade friction, President Donald Trump has imposed a
staggering 50% tariff on Indian exports, officially blaming India’s continued purchase of Russian
oil. Beneath this defensive posture, however, lies a glaring contradiction: while publicly chiding
India for its energy ties with Moscow, the U.S. continues to import strategically critical
commodities from Russia ,such as enriched uranium, palladium, fertilizers, and specialty
chemicals—demonstrating that its moral indignation rings hollow when its own industrial
interests are at stake. Leading trade analysts and institutes have denounced the move as
hypocritical, pointing out that China and the European Union face no such retaliation despite
their far larger volumes of Russian trade. India, in turn, has dismissed the tariffs as “unjustified
and unreasonable,” accusing Washington of political grandstanding rather than principled
diplomacy. This selective penalization threatens to churn bilateral trade—India’s exports to the
U.S. are estimated to suffer steep declines—and casts doubt on America’s credibility as a
champion of fair trade. As negotiations falter, the U.S. risks losing strategic influence and may
inadvertently push India closer into the orbit of Russia, China, and other global players—an
unintended outcome born from transactional brinkmanship rather than steady alliance-building.
Tariff Takedown: What 50% Duties Mean for; Indian
Exports
India’s ocean-based exports, which amount to approximately $2.8 billion, are heavily anchored
in prawn shipments—accounting for over one-third of that trade and serving as a vital income
source for coastal communities in Andhra Pradesh and Gujarat. Meanwhile, U.S. consumers
enjoy Ecuadorian prawns under a modest 15% tariff a stark contrast to the newly imposed 50%
duty on Indian seafood. This disparity puts immense pressure on prawn-farming hubs in Andhra
and Gujarat, where producers face a severe hit to both demand and profitability. And the damage
doesn’t stop there: India’s textile industry an employment powerhouse and export mainstay is
bracing for collateral consequences of this aggressive trade policy. With tariffs so steep, the
sector risks losing hard-earned competitiveness, as low-margin factories in states like Tamil
Nadu, Maharashtra, and Punjab may be forced to slash orders, cut margins, or even suspend
operations. In effect, these punitive measures could ripple through India’s rural economies and
manufacturing clusters, threatening livelihoods and undermining the resilience of export-oriented
industries.
New Executive Order and the New Consequence for;
USA
As previously discussed, if the United States proceeds with the proposed 50% tariff hike on
Indian imports—following a model similar to that used with Brazil—the repercussions for
India’s oceanic exports will be severe. Indian seafood, especially prawn exports, will struggle to
remain competitive in the American market when compared to Ecuador, which enjoys a
significantly lower tariff rate of just 15%. This disparity could result in a dramatic decline in
India’s seafood trade, giving Ecuador an overwhelming advantage and potentially dismantling
the Indian marine export sector. This move appears to be a calculated strategy by the U.S., aimed
at reshaping import dynamics in its favor.
However, there’s a notable twist in the timeline. The Trump administration had initially imposed
a 25% tariff without warning and is now preparing to increase it to 50%. But the implementation
has been delayed by nearly a three weeks delay that seems to revolve around one critical issue:
the export of generic medicines. India is a key supplier of affordable generic drugs to the
American healthcare system, with pharmaceutical giants providing essential medications such as
Atorvastatin, Lisinopril, Albuterol, and Omeprazole. Any disruption in this supply due to tariff
escalation could trigger a healthcare crisis in the U.S., both in terms of pricing and availability.
This pharmaceutical dependency is likely one of the few factors compelling the U.S.
administration to tread carefully, even as it sharpens its trade posture elsewhere.
Conclusion
The implementation of a sweeping 50% tariff on Indian exports by the U.S. is not just trade
policy—it’s a strategic blow that reverberates through the backbone of India’s economy. By
privileging Ecuador’s shrimp under a far lower duty and yet doubling down on punitive
measures against India’s seafood, textile, and gem sectors, the U.S. has effectively undermined
India’s competitive edge in labor-intensive exports. This move imperils the livelihoods of
millions—particularly in coastal Andhra Pradesh and Gujarat—and threatens the survival of
countless MSMEs that rely on access to U.S. markets. The tariffs also come at a steep cost to
U.S. consumers and doctors; disrupting the dependable supply of affordable Indian generics risks
higher drug prices and health risks at home.
Moreover, economists universally warn that such protectionism hinders productivity and
growth—contradicting free trade lessons from across Asia and beyond. By compromising
decades of competitive progress and strategic partnership, the U.S. risks driving India toward
alternate alliances and markets. If anything, this mercurial tit-for-tat trade posture threatens to
unravel trust, damage global markets, and undermine the very economic foundations it seeks to
protect.
AUTHOR: SURYATHEJUS R
UNIVERSITY OF DELHI.