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Strategic Autonomy: India's Enduring Principle Amidst Turbulence and Tariffs

  • Writer: Johnson Odakkal
    Johnson Odakkal
  • 5 days ago
  • 7 min read

On this 78th anniversary of its modern, independent, and sovereign journey, India’s strategic autonomy is once again at the forefront of its international relations. This principle, a cornerstone of its foreign policy since independence, reflects a deep-seated commitment to charting its own course amidst a complex global landscape. From the earliest days of decolonization and its leadership in the Bandung Declaration of 1955, India has steadfastly refused to align with any single power bloc, prioritizing its national interests and its role as a voice for the developing world. This approach, which allows it to maintain relationships across geopolitical divides, is a testament to its enduring diplomatic philosophy. It is a philosophy that has shaped its policies from its nuclear pursuits to its current energy needs.


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The relationship between India and the U.S. has been a journey of peaks and valleys. For much of the Cold War, the U.S. viewed India with suspicion due to its non-aligned stance and close ties with the Soviet Union, with friction over trade and U.S. support for Pakistan. The turn of the century, however, saw a significant shift, culminating in the landmark U.S.-India Civil Nuclear Agreement in 2008, which ended India's nuclear isolation and marked a high point in strategic partnership. The relationship deepened further through initiatives like the Quad, aimed at countering Chinese influence. Yet, with President Trump's re-election, a new period of tension has emerged, fueled by a 25% reciprocal tariff on Indian goods and unspecified penalties on Russia-related purchases. This transactional approach, which prioritizes trade deficit reduction, risks straining a partnership critical to both nations' long-term interests and stability against shared challenges.


As a response, the Indian Ministry of External Affairs pushed back such demands, making it clear that Washington’s latest trade salvos would not dictate New Delhi’s choices. In a sharply worded statement, the MEA noted that “the United States has in recent days targeted India’s oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India” (MEA, 2025). In other words, India is unwilling to bow to demands that undermine its right to source discounted Russian oil, a policy the U.S. itself encouraged in 2022, in the early months of the Ukraine war, to stabilize global prices. By labeling the American measures “unfair, unjustified, and unreasonable,” (MEA, 2025) New Delhi is not only defending a trade choice but reasserting the principle that its economic policy will be shaped in New Delhi, not in Washington. This Op-Ed traces the trajectory of this trade standoff, examines its sector-specific impacts, and assesses India’s enduring strategic importance to the U.S. amidst its rise as an Asian power of global significance.


The Trajectory of Trade Tensions


The current trade gridlock builds on a history of friction that began (2017-2020), during Donald Trump's first term. Back then, he took a jibe at India, labelling New Delhi as the “tariff king”, due to the latter's high tariffs and non-tariff barriers. He revoked India’s Generalized System of Preferences (GSP) status in 2019 citing the same reasons. As a response, India imposed tariffs on U.S. goods like almonds and apples. Though the tensions eased under the Biden administration, with the WTO disputes getting resolved by 2023, Trump's second term has seen intensified developments with regards to this tariff issue. On 1st February, 2025, Trump invoked the International Emergency Economic Powers Act (IEEPA), declaring trade deficits a national emergency and imposing a 10% baseline tariff on all countries, with higher “reciprocal tariffs” targeting nations like India with significant trade surpluses. Further, the 1st April “Liberation Day” saw a 26% tariff on Indian goods, which was later reduced to 25%, suspended for a period of 90 days. As of August 2025, these two countries have engaged in 5 rounds of talks, catalyzed by Prime Minister Modi's February visit to Washington. However, no deal has been finalized yet, which has led to commencing a 6th talk in New Delhi, later this month. Though initiatives like “U.S.-India COMPACT”, launched during Prime Minister Modi's visit aimed towards doubling bilateral trade to $500 billion, specific sectors like agriculture and dairy, have stalled progress. 


Sticking Points and Strategic Autonomy


India’s trade policy, rooted in strategic autonomy, prioritizes protecting its domestic industries and 700 million rural livelihoods, particularly in agriculture and dairy. The US, on the other hand, seeks greater market access for its farm products, including genetically modified corn and soybeans, viewing India’s $45.7 billion trade surplus in 2024 as a leverage point.  This policy is not a new reaction but is "rooted in a historical commitment to food security and farmer protection. 


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India's high tariff and non tariff barriers, such as Quality Control Orders and data localization rules, are seen as “obnoxious” by Trump, who demands near-complete market opening. However, New Delhi's refusal to liberalize agriculture and dairy reflects its historical commitment to food security and farmer protections, reinforced by the 2020 farm law protests. India’s strategic autonomy is also demonstrated through its energy and defense relations with Russia, with the former importing 1.75 million barrels of oil per day from the latter, from January to June this year, prompting Trump’s additional penalty. The additional 25% tariff imposed on India as a response to its oil purchases from the Kremlin aligns with U.S. efforts to isolate Russia over Ukraine. It is an example of India's diplomacy inspired by Arthashastra, which is about "maximizing flexibility while avoiding over-dependence". New Delhi’s BRICS membership and neutral stance enhances its global influence, complicating further alignment with the U.S. goals. 


Though India has offered concessions, including tariff reductions on 60% of U.S. imports and preferential access for 90%, alongside lowering tariffs on bourbon and motorcycles, it falls short on Trump's expectations and his aggressive deadlines. New Delhi’s cautious approach, prioritizing long-term benefits over a “hotchpotch deal,” reflects its strategic calculus to maintain policy independence while engaging Washington. 


Sector-Specific Impacts


Amidst this trade standoff, labour-intensive sectors like textiles and electronics face steep cost increases, eroding India’s edge over lower-tariff competitors such as Vietnam and Indonesia. Gems and jewellery risk market share losses, while auto parts and metals could see supply chain disruptions. Pharmaceuticals are partially shielded due to U.S. reliance on Indian generics, and services exports remain largely unaffected for now, though vulnerable to visa changes. Despite these headwinds, India’s competitive positioning of export diversification and free trade agreements with partners like the UAE and UK, offers a degree of resilience. 


India’s Rising Global Influence and Strategic Importance


Far from the “dead economy” comment made by Trump, India is projected to grow at 6.5% through 2026, retaining its position as the world’s fastest-growing major economy (Taxtmi, 2025). Its robust rebuttal to U.S. pressure, coupled with its ability to balance BRICS partnerships and Quad security commitments, underscores its emergence as a bridge between the Global South and Western powers. The MEA’s public critique of Western “double standards” on Russia is less a defensive reaction and more a declaration that India will not trade away strategic autonomy for short-term concessions. 


From a geopolitical perspective, India’s leadership in the Quad, naval modernization in the Indian Ocean, and strong foothold on key chokepoints like the Malacca Strait, aligns with U.S. goals to counter Chinese influence. India’s maritime dominance is critical for securing trade routes, reinforced by joint exercises like Malabar. Despite tensions over Russia, India’s exclusion from Trump’s July tariff letters and ongoing talks signal U.S. recognition of its strategic value. However, Trump’s transactional approach, i.e., prioritizing trade deficit reduction over long-term alignment, risks straining this partnership. Additionally, India’s refusal to fully align with U.S. sanctions on Russia reflects its Arthashastra inspired diplomacy, i.e., maximizing flexibility while avoiding over-dependence. 


The Path Forward: A Call for Nuance


The India-U.S. trade standoff reflects a clash between Trump’s aggressive protectionism and India’s strategic autonomy, with significant implications for bilateral ties. The upcoming 6th round of talks in New Delhi offers a glimmer of hope for a “mini-deal,” potentially focusing on labor-intensive sectors like textiles and gems while leaving more contentious issues like agriculture and dairy for future negotiations. India's resilience, reinforced by export diversification and competitive positioning, will help mitigate the impact of tariffs, although sustained tariffs could reduce its GDP growth by 0.5-1%.


For the U.S., maintaining India as a strategic partner is critical for securing supply chains and strengthening the Quad to counter Chinese influence. A nuanced U.S. approach is essential, recognizing that tariffs alone cannot dictate the trajectory of this indispensable partnership. India's rise as an Asian power demands that both nations prioritize long-term strategic alignment over short-term economic wins. India’s journey of strategic autonomy has prepared it to navigate such challenges, demonstrating its maturity as a global power unwilling to compromise its core principles for short-term concessions.


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