As the August 27 deadline approaches for a potential 25% additional tariff on Indian goods—announced by President Donald Trump as a penalty for India’s Russian oil imports—former Indian High Commissioner to Canada, Vikas Swarup, believes it’s crucial to view the situation beyond short-term pressures.“Let’s be clear—India does have cards,” says Swarup, underscoring that the country is far from powerless in this high-stakes standoff. In his view, Trump’s move is less about oil and more about coercive diplomacy. But Swarup believes India shouldn’t blink.Despite the provocation, Swarup strongly advises restraint over retaliation. “We have cards, yes—but smart diplomacy is knowing when to play them. Right now, it’s time for strategic patience,” he asserts.
India is the fastest-growing major economy, the fourth largest globally, and home to a booming consumer market. For many American tech companies, India isn’t just important—it’s indispensable. Add to that a diaspora of five million, over 330,000 Indian students in the US, and deep collaboration in fields like defence, space, and technology—and it’s clear why Swarup insists, “We are hardly a nation without leverage.”“We are the only real strategic bulwark to China in the Asia-Pacific—and Washington sees that,” he adds, pointing out that India’s geopolitical relevance as a counterweight to Beijing only strengthens its hand.
Swarup sees Trump’s tariff threat as part of his trademark “maximum pressure” strategy—an attempt to extract concessions by escalating tensions. But he believes other factors are also in play: Trump’s frustration with India’s refusal to publicly acknowledge his role in the India-Pakistan ceasefire, and discomfort over India’s continued engagement with the BRICS bloc, which the US president perceives as antagonistic to American interests.The tariffs, Swarup notes, are also a signal to Russia. Trump’s failure to secure a ceasefire in Ukraine—despite promises to do so within 24 hours of taking office—has led him to lash out economically in multiple directions.Surjit Bhalla, economist and former India Executive Director at the IMF, believes the US tariff announcement is part of a longer negotiation strategy—and not something India needs to panic over immediately.According to him, there’s still considerable time before the proposed 50% tariff becomes a reality, and India should view this period as a “chess game”—one in which it has every capacity to hold its own.He argues that India must remain focused on its own long-term economic interests, rather than being reactive to political optics from the West. “Reforms—particularly in trade and agriculture—should be pursued regardless of tariff threats. This is an opportunity India should seize.”Also Read | Fund managers say tariff shock may spur important economic reforms in India
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