Just over six months into his second presidency, Donald Trump is reshaping global trade diplomacy with the same aggressive unpredictability that defined his first term. For India, his return has not only revived tough tariff threats but also upended the delicate strategic balance it built with the United States in recent years.

In April, Trump proposed a 26 percent tariff on a range of imports, including Indian goods, unless a bilateral deal is struck by his July 9 deadline. While the administration granted a temporary 90-day suspension, pressure on New Delhi is mounting.

On July 4, India formally notified the World Trade Organization of its intent to impose retaliatory duties equivalent to the US auto tariffs ($725 million), reserving the right to suspend existing concessions. At the same time, India entered high-level trade talks in Washington to secure an interim agreement and avoid the tariff spike.

But so far, those overtures have made little difference.

At the centre of the trade standoff is agriculture, a cornerstone of India’s economy and a flashpoint in US-India relations.

Washington is pressing for greater market access for GM crops and American dairy products, but experts believe that such imports could harm India’s smallholder farmers while raising health, cultural, and environmental concerns. 

Commerce Minister Piyush Goyal said on Friday that New Delhi will not be rushed. “India is in no hurry to sign a trade deal,” he said, emphasising that any agreement must align with national interest and not be driven by “arbitrary deadlines or external expectations.”

Experts increasingly see this moment as part of a broader shift away from the strategic alignment that defined US–India ties over the past decade. While the Biden administration deepened cooperation in defence and emerging tech, Trump’s return has reintroduced unpredictability and an aggressive push for trade concessions.

What’s at stake?  

During his first term, Trump projected India as a key Indo-Pacific partner, but his second term appears more transactional and unpredictable.

New Delhi has set clear limits on trade in sensitive areas like dairy and grains—sectors that provide livelihoods to millions and are deeply tied to rural life and traditional diets.

Devinder Sharma, a leading agriculture policy expert, said: “Once we open up to American demands, it will mark the beginning of the end for Indian agriculture. If India gives in, not just the U.S., but the rest of the world will see it as a precedent.”

Nearly 700 million Indians depend on agriculture, Sharma noted. Any concessions on tariff protections or market access—particularly for highly subsidised US products—could devastate rural livelihoods.

“Importing food is importing unemployment,” he told TRT World.

Sharma is especially critical of Trump’s push for GM crop access and American milk exports, calling it an “agenda driven by corporate overproduction and propaganda.” 

“There isn’t a single GM crop that has increased productivity. It’s just lobby-driven rhetoric. And as for milk—India is the largest producer globally. We don’t need to import US surplus.”

He added, “By 2020, 93 percent of America’s dairy farms had shut down due to the rise of corporate mega dairies. Now, with too much milk, they’re pushing it on the world. Why should India suffer the same fate just to keep Trump happy?”

But beyond trade, Trump’s return is reverberating through India’s broader strategic environment – especially in its tense ties with Pakistan and China, where diplomatic fragility and regional power plays are increasingly intertwined with US policy shifts.

India’s regional political challenges

Recent military tensions between India and Pakistan, for which President Trump negotiated a ceasefire following an attack on Indian tourists in the Indian-administered Kashmir, have also exposed New Delhi’s diplomatic vulnerabilities.  

The Modi government launched a global diplomatic offensive accusing Pakistan of ‘cross-border terrorism’ but did not get a positive response. Quad foreign ministers’ joint statement condemned the attack without blaming Pakistan. 

“India had to dispatch a group of parliamentarians worldwide to present an Indian perspective, but the outcomes probably remained unsatisfactory,” said Praveen Donthi, Senior Analyst at the International Crisis Group.

He highlighted a shifting global dynamic in which India’s diplomatic weight is being tested amid competing priorities. “New Delhi is preparing for a rollercoaster ride, with highs and lows ahead,” he said.

However, he believes, “as long as there is no diplomatic fallout, the Indian government will be able to weather it.” 

Analysts describe India’s current ties with both China and Pakistan as “hostile coexistence,” with their deepening strategic and defence cooperation posing new challenges for New Delhi.  

“India is increasingly viewing Islamabad as Beijing’s coercive instrument in the region and will need to find ways to address the challenges,” Donthi told TRT World.

The unease deepened after Trump publicly claimed credit for mediating the ceasefire, an assertion New Delhi quickly denied. 

Further discomfort arose with reports of Trump’s planned visit to China, potential US concessions on critical minerals and semiconductor exports, and the invitation extended to Pakistan’s Army Chief Asim Munir for lunch at the White House. India’s opposition viewed these moves as diplomatic setbacks.

“There are multiple factors at play here,” said Aishwarya Sonavane, a research analyst on Pakistan at the Takshashila Institution.

“Pakistan’s geography—bordering Iran and Afghanistan—will always keep it relevant to the American strategic calculus, regardless of US-India ties. Western reluctance to hold Pakistan accountable may also stem from India’s ambiguous stance on issues like the Russia-Ukraine war.”

She added that false or exaggerated claims by sections of the Indian media later fact-checked, likely weakened India’s narrative strength.

Sustained diplomacy

After the May ceasefire, Trump posted on X that he would work with both countries to “find a Kashmir solution” after a thousand years. Islamabad seized the opportunity, crediting Trump with a “decisive diplomatic intervention” and suggesting he should be considered for the 2026 Nobel Peace Prize.

For India, the optics were uncomfortable. The government’s categorical denial of any US mediation role only highlighted the stark mismatch between the two narratives. 

Amid these shifting dynamics, analysts argue that India’s strategic playbook may require significant recalibration.

Prof. B.R. Deepak, who teaches at Jawaharlal Nehru University, said managing the two-front challenge of Pakistan and China will demand sustained diplomacy, military modernisation, and diversified partnerships.

“Historically, India has managed by deepening ties with major powers like the US and by de-hyphenating its broader policy from Pakistan. But a second Trump presidency could upend that calculus,” he told TRT World.

Deepak warned that Trump’s business-oriented pragmatism might result in a softer approach towards Beijing, leaving India with a shrinking strategic cushion.

“If that happens, India must rely on diversified partnerships and investing in credible deterrence,” he said.

He added, “But managing simultaneous tensions with China and Pakistan will require sustained diplomacy, military modernisation, and a hedge against Trump’s unpredictability.”