Has India Just Offer a Game-Changing Trade Deal to the U.S.?

On Monday, U.S. President Donald Trump claimed that India offered to slash tariffs on American goods to zero, a statement that has raised eyebrows amid escalating trade tensions. This announcement coincided with Indian Prime Minister Narendra Modi’s show of solidarity with Chinese and Russian leaders at the Shanghai Cooperation Organization (SCO) summit in China, where they collectively pushed back against Washington’s global trade pressures.

Trump’s remarks, posted on his Truth Social platform, described U.S.-India relations as “reciprocal” but suggested India’s offer came too late: “They’ve now offered to cut tariffs to nothing, but it’s too late. They should’ve done it years ago.” The Indian embassy in Washington has not responded to these claims, which follow the U.S. imposing steep 50% tariffs on Indian goods, fueling uncertainty about the future of bilateral ties.

Trump’s comments come at a time when India, a key U.S. strategic partner, faces mounting economic pressure. The 50% tariffs, including a 25% penalty for India’s continued purchase of Russian oil, have strained a relationship that had strengthened in recent years over shared concerns about China’s growing influence. Trump’s tariffs aim to curb Russia’s oil revenues and pressure Moscow to end its war in Ukraine, but India has resisted halting its Russian oil imports, citing energy security needs. This defiance has placed India alongside Brazil as one of the highest-tariffed U.S. trading partners, with sectors like textiles, gems, and seafood facing significant challenges.

Meanwhile, Modi’s visit to China—the first in seven years—signals a potential pivot. At the SCO summit, a China-backed initiative gaining prominence amid Trump’s tariff campaign, Modi and Chinese President Xi Jinping agreed their nations are partners in development, not rivals, and discussed boosting trade. A striking image from the summit showed Modi and Russian President Vladimir Putin, hand-in-hand, walking toward Xi with smiles, projecting unity among the Global South. This display underscores India’s efforts to diversify its economic alliances as U.S. tariffs threaten its $86.5 billion export market to the States. Beijing seized the opportunity to strengthen ties with New Delhi, with Xi advocating for a new global economic and security order.

The U.S.-India relationship, once bolstered by mutual strategic interests, now faces a critical juncture. Trump’s claim of a zero-tariff offer, if true, could signal India’s attempt to mend ties, but its timing and authenticity remain unconfirmed, especially as New Delhi doubles down on its strategic autonomy. India’s push for self-reliance and new trade partnerships with countries like the UK and Australia reflects a broader strategy to navigate Trump’s trade war.

For now, neither the White House nor the U.S. State Department has commented on Modi’s SCO summit remarks or the broader implications of this diplomatic shift. As India balances its economic ambitions with global pressures, investors and policymakers alike are left wondering: Could this tariff dispute reshape global trade alliances?