India & the USA: Democracies at war (Part 2)

 

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The new tariff regime, including punitive tariffs, has since been implemented by the USA on Indian imports. Currently, the negotiations are in a near abeyance. The road to thawing the current standoff will depend on the maturity and pragmatism displayed by the leadership of both countries. The importance of a healthy and mutually beneficial relationship, both for the world as a whole and the two countries themselves, between the two largest democracies in the world cannot be overemphasized.

The heads of government in all countries are supported by a host of advisers on different matters. Such advisers are distinct from the bureaucracy, which is a permanent link in any governance. The bureaucracy is authorized to act on behalf of the government, as it is the executive arm. Normally, the advisers do not have such executive responsibilities and powers. The bureaucracy represents a nation’s government, internally and externally, in its dealings with citizens and other countries, including issuing formal communications as required. However, advisers have a limited role in this regard as they are not part of the executive.

A report by The Independent from the UK, dated August 28, 2025, includes details of what Mr. Peter Navarro, an adviser to President Trump on trade and manufacturing, has said. He has called the war in Ukraine ‘Indian Prime Minister Mr Narendra Modi’s war’. He claims that India’s ongoing purchases of Russian oil were ‘funding the war machine’. In an interview with Bloomberg TV, he said, “Everybody in America loses because of what India is doing.

Consumers, businesses, and workers lose because India’s high tariffs cost us jobs, factories, and income. And then the taxpayers lose because we’ve got to fund Modi’s war.” He further said, “What’s troubling to me is that the Indians are so arrogant about this. They say, ‘Oh, we don’t have higher tariffs. Oh, it’s our sovereignty. We can buy oil from anyone we want.’ India, you’re the biggest democracy in the world, okay, act like one.” He finished by saying, “The road to peace runs at least partly right through New Delhi” and “Look, it’s really easy. India can get 25 per cent off tomorrow if it stops buying Russian oil.”

Before one gets into the ‘right or wrong’ of claims made by Mr Navarro, it is important to reiterate that his outbursts were totally out of place in his capacity as an adviser to the US President. It is well known that Mr. Trump himself has no time for diplomatic protocols or niceties, and perhaps that rubs off on his staff also. Suffice it to say that international disputes and differences do not get resolved in this manner.

The claims that high Indian tariffs result in the loss of jobs, factories, and income in his country are bizarre, coming from a trade expert. The USA exported a total of about $3.05 trillion in goods and services in 2023. India’s share in this was approximately $37 billion, which is about 1.02%. It defies logic how the world’s most developed and largest economy can claim that comparatively higher tariffs on a part of 1.02% of its total exports can result in such losses. The value of U.S. military equipment sales to foreign governments in 2024 reached a record $318.7 billion. Increased demand was a result of NATO countries replenishing stockpiles and the weapons sent to Ukraine at the behest of the USA. The US armament industry has made huge profits at the cost of Ukraine and its people. Has Mr Navarro taken into account the colossal profits made from such sales?

There is no doubt that India has increased its oil imports from Russia in the last two years. But what the USA deliberately overlooks are the much larger imports of oil by China and gas by the European Union from Russia. But that is not all. Even the USA continues to trade with Russia for some of its critical nuclear materials, among other products. Yet, both the President and his Trade Adviser think only the profits from Indian purchases sustain Russia’s offensive in Ukraine. The reality is that it is an American proxy war being fought by a hapless Ukraine. The trigger for the war was the expansion of NATO despite Russian warnings and past assurances by the USA and NATO to refrain from doing so. The blood and devastation of Ukraine are the result of this war that it could never have afforded or won.

His statement that India could easily get 25% off tomorrow if it stops buying Russian oil smacks of arrogance and a misplaced superiority complex. He will do well to understand that neither India’s economy is dependent on the USA nor is its sovereignty negotiable. If rich nations like the USA or the European Union can continue to trade with Russia despite the ongoing war, why should that not apply to India as well? The badgering of India appears to be a deliberate campaign to stymie its unprecedented growth in the last few years.

It suits Western interests to keep India poor, embroiled in regional conflicts, and dependent on the West.

Today, the USA is struggling to retain its pole position in the changing world order. The MAGA slogan is a result of this harsh reality. It views the rise of

China, India, and BRICS as a threat to the traditional hegemony that it has enjoyed since the end of World War II. Internally, the country is grappling with many serious issues that contribute to this developing situation. Its GDP is growing at less than 3%. Its external debt of $28 trillion is getting unmanageable. The basic manufacturing base has shrunk over the years due to over-reliance on outsourcing. Its supply chains are vulnerable to disruptions. Job creation and investment, particularly in rural regions and older industrial hubs, are very low. Its population is aging because of declining birth rates and increased longevity.

Another major concern is the income disparity between migrants from Asia and American citizens. The US Census Bureau figures for Real Median Household Income for 2023 were, $89,050 for Whites, $56,490 for Black Americans, and $112,800 for Asian immigrants. The national average was $89,050, while for Indian households it was $151,200 (PEW Research). This disparity is a result of a lack of higher education among a large percentage of American citizens. For the record, an impressive 77% of Indian Americans aged 25 and older have a bachelor’s degree or higher. Is it any wonder that major corporations like Google, Microsoft, Novartis AG, Adobe, IBM, Chanel, Micron Technology, Palo Alto Networks, and Cadence within the USA today are headed by Indians? This growing Indian influence within America does not sit well with the Trump administration.

There are many questions about whether the Trump administration&’s new tariff regime will solve America's economic issues. Those in favour argue that they protect American industry and jobs, and reduce trade deficits. Those opposed to it maintain it will lead to higher consumer prices, reduced demand, and slower growth. The US appeals Court has ruled that many of Trump’s new global tariffs are illegal. The government’s appeal is pending in the court. The Congressional Budget Office estimates that the new tariffs will reduce the external debt by about $2.5 trillion by 2035. This is not a very significant figure by any yardstick. The moot question is, will the new tariff regime boost local manufacturing and encourage the buying of American-made products? Perhaps it is too early to pass judgment on this issue, as local manufacturing will take time to take off.

In the end, the American claims of an equitable world order based on democratic principles and the upliftment of humanity sound hollow. The current American government aims to dictate and dominate with scant concern for internationally accepted norms and rules. It views the rise of BRICS as a serious concern when the need of the hour is to find ways of partnering with such initiatives for mutual growth. Times have changed, and so should the USA to ensure a world order based on equity, mutual respect, and participative growth. Any efforts by individual leaders to lead their nation with personal egos or to aggrandize themselves will always be detrimental to the country.

For India, the current standoff with the USA is also an opportunity to put its house in order for a more conducive climate for rapid growth, both within and in partnership with other nations. It must avoid forming partnerships that offer only short-term benefits. Perhaps it is a defining period for India to seek its rightful place in this newly emerging geopolitical world order.

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