New Delhi | August 7, 2025: Prime Minister Narendra Modi pushed back hard Thursday against the United States’ decision to double tariffs on Indian goods, saying he won’t sacrifice the interests of Indian farmers—even if it costs him politically.
“For us, our farmers’ welfare is supreme,” Modi said at a public event in Delhi, without directly naming the United States. “India will never compromise on the wellbeing of its farmers, dairy sector, or fishermen. And I know personally I will have to pay a heavy price for it.”
His remarks came less than 24 hours after former US President Donald Trump, now a 2025 Republican frontrunner announced a steep 25% tariff hike on Indian imports, raising the total to 50%. The measure is set to take effect on August 28.
Why the US Raised Tariffs on India
Trump has framed the move as retaliation for India’s continued purchases of Russian oil, a thorny issue in Washington’s broader sanctions push against Moscow. India has defended its energy strategy as vital for national interests, even as it ramps up clean energy efforts domestically.
But trade talks between the two countries had already collapsed after five rounds of negotiations. At the core of the deadlock: US demands for wider access to India’s agricultural and dairy sectors both politically sensitive areas for Modi and India’s refusal to scale back its energy ties with Russia.
In a statement, India’s foreign ministry called the decision “extremely unfortunate” and said it would “take all necessary steps to protect its national interests.”
Dammu Ravi, Secretary (Economic Relations) in the foreign ministry, criticized the US decision as arbitrary. “The U.S. tariff hike lacks logic,” he told reporters. “This is a temporary problem that the country will face, but in course of time, we are confident the world will find solutions.”
Rising Pressure on Modi, at Home and Abroad
The timing of the tariff hike could not be worse for Modi. With global markets already shaky, Indian exporters are warning of massive disruptions. Sudhir Sekhri, chairman of the Apparel Export Promotion Council, said the hike was “devastating” and demanded immediate fiscal support from the government.
India’s stock markets reflected that anxiety. The Nifty 50 fell 0.5% on Thursday, slipping to a three-month low, as foreign investors braced for a prolonged standoff. Billionaire Mukesh Ambani’s Reliance Industries also flagged “geopolitical and tariff-related uncertainties” as a major risk in its annual report.
Meanwhile, political pressure is mounting on Modi to strike back.
Even the opposition Congress party which rarely agrees with Modi on economic strategy urged a strong response. “India’s national interest is supreme. Any nation that penalises India for its strategic autonomy does not understand the steel frame this country is made of,” said Congress President Mallikarjun Kharge.
Modi’s core voter base farmers and small business owners, has also rallied behind his stand. But sustaining that support may depend on how quickly his government can soften the economic fallout.
Is a Realignment in the Works?
What’s especially notable is how Modi seems to be repositioning India diplomatically. According to diplomatic sources, he is preparing for a major visit to China his first in over seven years. That trip, expected sometime in September, could signal a fresh pivot toward Beijing and other non-Western partners.
Brazilian President Luiz Inacio Lula da Silva said Wednesday he would initiate talks within the BRICS bloc (Brazil, Russia, India, China, South Africa) to counter the economic shockwaves from Trump’s tariffs.
“I plan to speak with both Modi and Xi Jinping,” Lula said. “We need a coordinated response.”
India’s foreign ministry also hinted at broader recalibrations. “Like-minded countries will look for cooperation and economic engagement that is mutually beneficial,” Ravi said.
So what this really means is India might be moving away from a West-dominated trade framework toward a more multipolar economic order driven by strategic autonomy, not alignment.
Whether the US tariffs are a temporary bargaining tactic or a long-term policy shift under Trump 2.0 remains to be seen. What’s clear for now is that India’s leadership has decided it won’t blink first.