Trump’s Tariffs and India’s Tightrope

By Sanjeev Oak

Donald Trump’s tariff shock has reignited global trade anxieties. For India, the choice is stark—double down on Western markets or gamble on BRICS. The answer is clear: tariffs may sting, but BRICS won’t rescue India’s growth ambitions.

When US President Donald Trump announced fresh tariff hikes on Indian exports, the tremors were felt not just in trade corridors but in New Delhi’s diplomatic calculus. Almost immediately, External Affairs Minister S. Jaishankar’s remarks in Moscow gained added urgency: India needs to hedge against protectionist headwinds from the West by deepening its economic embrace with Russia.

“The more intensive the engagement between Indian and Russian companies, the more resilient our economies become against external shocks,” Jaishankar stressed.

This wasn’t merely rhetoric. It was a clear signal that India, while not turning its back on the West, is preparing fallback options in a world where globalisation is fragmenting, supply chains are weaponised, and trade flows are politicised.

Why Russia, Why Now?

India-Russia ties have long carried a defence-heavy tilt. But what Jaishankar is pitching now goes beyond nostalgia or geopolitics—it’s about economic diversification. With India’s economy growing at over 7% and infrastructure spending surging, the ground is fertile for Russian participation.

From fertilisers to energy equipment, from chemicals to machinery, Moscow has capacities that dovetail with India’s rising demand. Conversely, India provides Russia with an expanding market and a hedge against overdependence on China—an imbalance that has been stark since the Ukraine war.

“Trade between our nations has grown, but it remains skewed. We must move beyond hydrocarbons and defence,” the minister observed, urging a shift toward balanced, multi-sector cooperation.

The Trump Factor

Jaishankar’s pitch can’t be divorced from Trump’s tariffs. Washington’s sudden decision to raise duties on Indian goods has thrown open uncomfortable questions about India’s trade reliance.

For New Delhi, it underscores a strategic truth: globalisation is no longer a guarantee of open markets. When America sneezes, supply chains wobble. That makes it imperative for India to weave denser ties with other partners, Russia included.

Seen through this lens, Jaishankar’s Moscow speech is as much about pre-emptive diversification as it is about bilateral enthusiasm. It’s about creating economic buffers against Western unpredictability.

Sectors on the Table

So where exactly can India and Russia expand beyond oil?

• Fertilisers: India remains heavily reliant on imports. Russia is among the few dependable large-scale suppliers.
• Chemicals and Pharmaceuticals: Both sides see complementarities; Indian generics, Russian raw materials.
• Machinery and Engineering Goods: With India’s “Make in India” drive, Russian firms could set up joint ventures rather than remain mere exporters.
• Infrastructure and Energy Equipment: India’s massive urbanisation requires capacities Russia has historically developed.

Each of these sectors, Jaishankar suggested, should move from transactional trade to longer-term investment partnerships.

The FTA Horizon

At the heart of the new push lies the India–Eurasian Economic Union Free Trade Agreement (FTA). Negotiations have been slow, but both sides now seem eager to fast-track. If signed, the FTA could slash tariffs, ease mobility, and encourage investment flows at a moment when India needs to widen its trade options.

“The conclusion of Terms of Reference for the FTA with the Eurasian Union is no longer a matter of if, but when,” Jaishankar hinted, adding weight to a process that has often been stuck in bureaucracy.

A pact with the EEU wouldn’t just boost Russian trade; it would connect India with a regional bloc spanning Armenia, Belarus, Kazakhstan, and Kyrgyzstan—an alternative economic corridor at a time when China dominates Asia’s trading landscape.

Public–Private Bridge

A striking theme in Jaishankar’s remarks was the call for alignment between government diplomacy and private sector action. Signing MoUs in conference rooms, he implied, will mean little unless businesses on both sides put capital on the ground.

That’s easier said than done. Indian firms remain wary of Russia’s sanctions-stricken economy, while Russian companies often complain about India’s regulatory maze. But precisely here lies the test: can both governments smoothen the terrain enough to make investments viable?

“What we do in the public sector must be matched by energy in the private sector. Otherwise, progress will remain on paper,” he cautioned.

Reading the Signals

What makes Jaishankar’s Moscow message notable is its layered signalling.

• To Washington, it is a reminder that India has options, even as it remains a strategic partner in the Indo-Pacific.
• To Moscow, it is reassurance that India is not drifting away despite Russia’s tilt toward Beijing.
• To the domestic business community, it is an invitation to think east and north, not just westward.

The geopolitical context gives the economic argument sharper edges. India doesn’t want to be boxed in by Western tariff walls, nor does it want to appear over-reliant on an unpredictable Russia. The answer, ironically, lies in creating a denser India–Russia economic web—so both gain resilience, but neither dominates.

The Roadblocks Ahead

Still, challenges abound.

• Sanctions Risk: Western secondary sanctions on Russia remain a real deterrent for Indian banks and corporates.
• Logistics and Connectivity: Trade routes remain clumsy, with the International North-South Transport Corridor still incomplete.
• Trust Deficit in Business Circles: Indian firms often find Russian partners opaque; Russians complain about slow Indian decision-making.

These hurdles explain why, despite lofty political rhetoric, India-Russia trade (hovering around $65–70 billion) remains narrow and imbalanced, dominated by crude oil imports.

Strategic Hedge, Not Pivot

What Jaishankar is proposing is not a pivot but a hedge. India isn’t abandoning the US or EU markets; it is building alternative cushions.

This hedging is quintessentially Indian foreign policy—multipolar engagement for maximum manoeuvrability. As tariffs rise in Washington, and sanctions squeeze Moscow, New Delhi is signalling: it will not be hostage to either.

“The era of single-source dependence is over. Our partnerships must be broader, more diverse, and more balanced,” Jaishankar asserted.

The New Grammar of Trade Diplomacy

In a world where tariffs and sanctions increasingly shape geopolitics, Jaishankar’s Moscow pitch is less about nostalgia for Indo-Russian friendship and more about a pragmatic grammar of resilience. India is preparing for shocks, building redundancies, and ensuring its growth story does not falter because of external volatility.

The Trump tariff shock was a wake-up call. The Russia outreach is the counter-response. Whether Indian and Russian companies seize this moment will decide if the rhetoric turns into reality.