Trump poised to reset U.S.–India trade balance with new tariff policy

Trump signals a possible tariff cut for India as his loyal ally Sergio Gor becomes U.S. ambassador, reshaping Washington–New Delhi trade diplomacy.

A signal of thaw in U.S.–India ties

U.S. President Donald Trump has hinted that tariffs on Indian goods could soon be lowered, suggesting a potential thaw in months of strained relations between Washington and New Delhi.
The remarks came as Sergio Gor, one of Trump’s closest allies, was officially sworn in as the U.S. Ambassador to India on Monday — a move analysts describe as an effort to reset bilateral diplomacy through a more personal, fast-tracked channel.

Speaking at Gor’s swearing-in ceremony, Trump said,

“The tariffs on India are really high because of the Russian oil [imports], but they have now substantially reduced Russian oil [imports], so we will be bringing the tariffs down.”

However, data tells a more complex story. Market analytics firm Kpler reported that India’s imports of Russian crude remained largely unchanged in October, averaging 1.59 million barrels per day (mbd), just slightly below September’s 1.6 mbd.
That means, despite Trump’s remarks, India’s dependency on Russian energy continues — an issue that has long frustrated Washington since the Ukraine conflict.

A loyalist diplomat with a political mandate

The appointment of Sergio Gor underscores Trump’s personalized style of diplomacy.
Gor, a political loyalist and longtime campaign aide, was confirmed by the Senate on October 7 and arrived in New Delhi shortly after, meeting with Prime Minister Narendra Modi to discuss defense, technology, and trade cooperation.

“We also discussed the importance of critical minerals to both of our nations,” Gor said in a statement after the meeting, signaling that energy security and supply chain resilience would be top of his agenda.

According to Trump, Gor’s priorities as ambassador include:

Promoting investment in U.S. industries,

Increasing American energy exports, and

Expanding security cooperation with India.

Trump added that Gor would “strengthen one of the most important relationships — the strategic partnership with the Republic of India.”

Political analysts say this move reflects the White House’s push for direct engagement with key allies — bypassing bureaucratic layers of traditional diplomacy.
“Appointing a ‘political’ ambassador rather than a career diplomat may indeed speed up negotiations, but it also makes relations more volatile if domestic sentiment shifts,” said Alexandra Hermann, senior economist at Oxford Economics.

Trade friction and the tariff dilemma

The prospect of tariff reduction comes after months of rising friction between the two nations.
Earlier this year, the U.S. imposed up to 50% tariffs on select Indian exports, citing market protection and India’s continued energy ties with Moscow. In response, New Delhi deepened engagement with Russia and China through multilateral platforms like the Shanghai Cooperation Organization (SCO).

At the SCO Summit in Tianjin, a viral clip showed Modi laughing alongside Chinese President Xi Jinping and Russian President Vladimir Putin — a visual that fueled narratives of India inching closer to the Moscow–Beijing axis.

Former Reserve Bank of India Governor Raghuram Rajan warned that history may be repeating itself:

“The last time Washington tilted toward Pakistan, in 1971, it pushed India closer to the Soviet Union for the next 25 years,” he said during a November 6 event hosted by the Chicago Council on Global Affairs.

Experts say the same risk applies today if the U.S. continues to use punitive trade measures as leverage against India.
“It can’t be that you are the most tariffed country in the world, even more than China, and then talk about friendship and joint maneuvers,” Rajan added.

Energy and geopolitics: India walks a tightrope

India’s continued imports of Russian crude remain a sticking point for Washington.
While the West has tried to cap Russian oil prices, India has strategically diversified its supply chain by buying discounted barrels from Moscow — a decision driven by economics more than politics.

According to Kpler data, India’s crude imports from Russia in October accounted for roughly 40% of its total oil supply, despite Trump’s claim of a reduction.
Analysts note that while imports may fluctuate, New Delhi is unlikely to fully abandon Russian energy given cost advantages and refining compatibility.

Nonetheless, U.S. officials have acknowledged India’s balancing act — managing energy security while expanding strategic cooperation with Washington.
Under Gor’s tenure, the U.S. is expected to offer alternative energy partnerships, particularly in LNG, renewable technology, and critical minerals.

India’s deepening engagement with Russia

In a parallel development, India continues to expand commercial links with Russia, even as it maintains strong defense and technology partnerships with the U.S.

This week, the Federation of Indian Export Organizations (FIEO) announced that a delegation of 20 Indian companies participated in the Moscow International Tool Expo, under the banner of the Ministry of Commerce & Industry.
FIEO President S.C. Ralhan said that India’s engineering exports to Russia are expected to reach $1.75 billion this year, highlighting momentum in bilateral trade.

However, despite these growing ties, the U.S. remains India’s most important economic partner.
According to the Indian Brand Equity Foundation (IBEF), India exported $4.88 billion to Russia but imported $63.84 billion in FY2025.
By contrast, the U.S. accounted for 18% of India’s total exports, compared to just 1% for Russia.

Hermann from Oxford Economics summed it up succinctly:

“Russia may offer India short-term economic benefits, but the U.S. remains its indispensable long-term partner.”

The road ahead: cautious optimism

Trump’s suggestion of reducing tariffs marks a potential turning point in U.S.–India relations — but one fraught with uncertainty.
While Sergio Gor’s appointment injects political energy into diplomacy, his lack of traditional experience could also test the durability of bilateral cooperation amid shifting domestic politics in both countries.

For India, the challenge lies in balancing energy pragmatism with strategic alignment, while for Washington, it’s about managing expectations without alienating an essential Indo-Pacific partner.

Whether the coming months yield an actual trade deal or merely symbolic gestures will depend on both sides’ ability to bridge the gap between rhetoric and reality.

FAQs

1. Why did Trump hint at lowering tariffs on India?
He suggested that tariffs could be reduced because India has “substantially” cut Russian oil imports — a claim that market data disputes.

2. Who is Sergio Gor, and why is his appointment significant?
Gor is a longtime Trump loyalist and political operative. His posting to India signals a push for faster, more personalized diplomacy with New Delhi.

3. How significant is Russia to India’s trade?
While India’s trade with Russia is growing, it still accounts for only 1% of exports — compared to 18% for the U.S. — underscoring America’s larger economic role.

4. What’s next for U.S.–India relations?
Experts expect cautious optimism: progress on trade and defense cooperation is possible, but energy policy and tariffs remain key hurdles.