Trade Talks or Trade Tensions? India&ndash;US Ties Under Strain as Tariff War Meets Oil Criticism
In an unexpected collision of diplomacy and political posturing, <a title="US" href="https://www.benefitnews24.com/business/trump-hits-indian-exports-with-25-tariff/17227" target="_blank" rel="noopener">US</a>-<a title="India" href="https://www.benefitnews24.com/business/india-us-still-negotiating-tariff-deal/17233" target="_blank" rel="noopener">India</a> trade relations appear to be caught in a paradox. Even as official channels on both sides insist that negotiations are progressing under a framework agreed in March 2025, a fresh wave of hostile rhetoric from Washington risks derailing the dialogue.
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At the heart of the current tension is President Donald Trump&rsquo;s decision to impose a blanket 25% tariff on Indian imports &mdash; a move that has unsettled trade officials in New Delhi and prompted questions about the sincerity of ongoing economic engagement. However, the situation is further complicated by public accusations from Trump&rsquo;s close aide, Stephen Miller, who has launched a scathing attack on India&rsquo;s continued purchase of Russian oil.
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Miller, Deputy Chief of Staff at the White House and an influential voice in Trump&rsquo;s inner circle, accused India of &ldquo;financing the Russia-Ukraine war&rdquo; through its energy ties with Moscow. His remarks, delivered with characteristic bluntness, suggested that India&rsquo;s oil trade is nearly on par with China&rsquo;s when it comes to volumes sourced from Russia &mdash; an assertion likely to cause consternation in Delhi.
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The timing of the tirade is significant. It comes just days after Trump imposed tariffs and publicly criticised India&rsquo;s relationship with Russia, describing both economies as &ldquo;dead.&rdquo; At the same time, trade negotiators from both countries have remained engaged &mdash; quietly and consistently &mdash; to iron out a bilateral trade agreement that has been in the making since March.
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Sources close to the Indian side suggest that the talks are very much alive, and that the mutually agreed framework from March 29 continues to be honoured. The working-level understanding includes room for collaboration in the energy sector, with the possibility of reciprocal energy trade. However, there is no clause prohibiting either country from independently purchasing energy from third-party nations.
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The disconnect between official engagement and political messaging is stark. On April 22, US Vice President JD Vance had publicly confirmed the finalisation of a Terms of Reference (ToR) for a future trade deal during his visit to New Delhi &mdash; describing it as a "vital step" toward deeper commercial ties. That optimism now seems at odds with the political storm brewing in Washington.
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In New Delhi, officials remain cautiously optimistic, privately viewing the latest rhetoric as &ldquo;politically motivated noise&rdquo; rather than a collapse in dialogue. But with Trump&rsquo;s re-election campaign entering high gear and his administration doubling down on anti-China and anti-Russia narratives, India risks being caught in the crossfire.
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For now, the trade talks survive &mdash; tethered to a fragile diplomatic thread, even as political winds on either side pull in conflicting directions.
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Stephen Miller, Deputy Chief of Staff at the White House

Amid tariffs and oil accusations, US-India trade negotiations hang in delicate balance

When US-India Trade Meets Russia Oil...

Amid tariffs and oil accusations, US-India trade negotiations hang in delicate balance

August 4, 2025 | 11:41 IST