President Donald Trump imposed a 25% tariff on Indian imports on August 1, 2025, and an additional 25% tariff on August 6, 2025, citing India’s continued purchase of Russian oil. This decision was announced amid ongoing Indo-U.S. trade talks, with a U.S. delegation expected to arrive in New Delhi in the coming weeks for trade negotiations. India has called the decision unfair, unjustified, and unreasonable. Recently, reports have indicated that the Indian side has demonstrated tough negotiation skills and resisted U.S. demands to compromise in the agriculture, fishery, and dairy sectors to protect Indian farmers. Now, India has decided to halt the procurement of the remaining Poseidon P-8I anti-submarine aircraft to be operated by the Indian Navy.
In one of the responses, India halted a $ 3.78 billion deal for 6 additional Boeing P-8I Poseidon aircraft, which aims to increase maritime monitoring capabilities. The Indian Navy is already operating 12 Poseidon P-8I aircraft, and the purchase process of new aircrafts was in the final stages.
The implications for the security of the Indian Ocean Region are significant; however, the Indian government is demonstrating maturity in its response to the U.S. tariff attack on Indian products by adopting a measured response, with halting the Poseidon P-8I anti-submarine aircraft deal being one such action.
India is accelerating the development of the following indigenously:
- DRDO-HAL Medium Marine Patrol Aircraft (MMPA) based on Airbus C 295 platform
- Airbus C-295 MPA version for Navy and Coast Guard.
The purpose of these platforms is to reduce dependence on US defense systems and strengthen domestic capacity.
In a symbolic response to unreasonable tariffs imposed by the U.S. citing India’s purchase of Russian Oil, Indian National Security Advisor Ajit Doval and External Affairs Minister S Jaishankar are going to visit Russia soon, where they will hold a meeting with top Russian officials. The purpose of this meeting is to strengthen security, economic and energy relations in the backdrop of American tariff threats.
Donald Trump, President of United States
Narendra Modi, Prime Minister, India
S Jaishankar, External Affairs Minister, India
U.S. continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilizers as well as chemicals. In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.
How Indian Market Responded?
The Indian market demonstrated resilience by avoiding a catastrophic decline, but the increased tariffs caused some damage. The intra-day decline of 700–800 points and losses of up to 7% in specific sectors, particularly for export-oriented companies, indicate a real impact. The absence of a bloodbath or steep decline can be attributed to the strength of the Indian domestic market, limited exposure in select sectors, and hopes for diplomatic solutions for now.
What Lies Ahead?
Although India and U.S. are still engaged in trade talks, the current fragility in the ties reflects a larger geopolitical renovation. India is emphasizing its non-aligned trend and opposing the pressure to mold in accordance with Western sanctions. The suspension of the Poseidon P-8I deal is not just the issue of defense purchase – it is India’s strategic message & steps to protect local business, especially farmers and energy requirement of Indians, in which U.S. is trying to interfere & influence to cover its inefficiency in reaching a mutually beneficial trade deal or stop the war in Ukraine.
India’s suspension of the $3.78 billion Poseidon P-8I deal is seen as a strategic signal that India is willing to leverage defense procurement to uphold its autonomy. It also sends a direct message that the purchase of Russian oil is driven purely by the need to meet the massive energy demands of 1.4 billion citizens & the connected indigenous industries.
India’s approach, diversifying its defense partnerships, strengthening indigenous capabilities, and continuing to buy the most affordable oil available in the global market (currently from Russia), is rooted in economic pragmatism, a common sense.
The outcome of this has impacted Indo-U.S. ties and could reshape the future of their defense and trade relations, unless President Trump takes a U-turn, annuls his tariff aggression, and stops seeking false credit for facilitating a ceasefire during the recent four-day India-Pakistan war.
Vain glory and puffery will not work with India, the world’s largest democracy and the fourth-largest economy, valued at $4.19 trillion with a 6.2% GDP growth rate. India recognizes its true friends and yet, believes in multilateralism.
President Trump must realize that if there is one country who can never stop Russia-Ukraine War, it is the United States of America, the earlier he understands, the better it is. Inflicting trade pains on India, China, Brazil & South Africa to tame Russia will only consolidate global south against U.S. hegemony.