U.S.-India Trade Saga: Trump's Tariffs, New Deals, and Diplomacy Strain

Donald Trump announced a new trade deal with India, accompanied by a commitment from New Delhi to halt Russian oil purchases in favor of U.S. oil. The U.S.-India trade ties hit a low after Trump imposed tariffs, but despite tensions and stalled negotiations, Indian exports have risen due to increased electronics exports.

In a significant development, former U.S. President Donald Trump announced on Monday the sealing of a new trade deal with India, which includes a commitment by New Delhi to cease its purchase of Russian oil. Instead, India plans to increase its oil imports from the United States and potentially Venezuela.

The U.S.-India trade dynamics have seen a turbulent year. Between April and August 2025, tensions soared after Trump imposed a steep 50% tariff on Indian goods, doubling the previous rates and straining bilateral relations to a historic low. Trump's tariff actions were a response to India's decision to buy Russian oil, which was viewed unfavorably by Washington.

Despite the high tariffs, Indian exports to the U.S. showed resilience, benefiting from an uptick in electronics exports. However, India's equity markets and currency have suffered. Leaders from both nations remain embroiled in a complex diplomatic dance, with India pivoting towards improved relations with China and securing a trade agreement with the European Union.

(With inputs from agencies.)