Now Reading: Trump 2.0 tariffs expose limits of India-U.S. tech partnership
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Trump 2.0 tariffs expose limits of India-U.S. tech partnership
The United States’ tariffs on Indian exports in August 2025 have revealed that technology partnerships cannot be insulated from trade politics, according to an analysis by the Carnegie Endowment for International Peace.…
The United States’ tariffs on Indian exports in August 2025 have revealed that technology partnerships cannot be insulated from trade politics, according to an analysis by the Carnegie Endowment for International Peace. The episode, which saw Washington double tariffs within weeks, demonstrated that market access can be weaponised and that supply chain participation is conditional. India and the U.S. eventually reached an interim trade agreement in February 2026, but the tariff stand-off made clear that deeper technological integration depends on trade openness.
India’s response has been four-pronged: internal policy recalibration, a distinct approach to reducing strategic dependence on China without fully decoupling, calibrated diplomacy with Washington, and expediting trade agreements with other partners. New Delhi had already begun tariff reforms in March 2025, before the U.S. escalation. The analysis suggests trade agreements are now seen by India as the necessary infrastructure for its technology ambitions, since advanced technologies require integrated supply chains that in turn depend on diversified input sourcing and trade openness.
Indian Opinion Analysis
The tariffs imposed by the U.S. in August 2025 were on a list of goods including steel, aluminium, and some pharmaceuticals, sectors where India has significant export exposure. India’s retaliatory tariffs were measured, affecting American almonds and apples, which are politically sensitive in U.S. farm states. New Delhi’s decision to expedite trade agreements with the EU (a free trade agreement is under negotiation) and the UK shows a strategy of diversification away from reliance on any single partner. The interim BTA signed in February 2026 reportedly covers only tariff reductions on $28 billion of two-way trade, leaving market access for agriculture and services to a later phase. The next concrete signal to watch is whether the BTA expands into a comprehensive deal before the U.S. mid-term elections in November 2026, which would change the politics of trade concessions.
Source: carnegieendowment.org
This story was synthesised by AI from the source linked above.
