From ‘Howdy Modi’  to heavy tariffs: Trump-Modi friendship hits  breaking point

MNTV Analysis

WASHINGTON/NEW DELHI (MNTV) – Just six months ago Indian Prime Minister Narendra Modi’s first visit to Washington under Donald Trump’s second term was being described as sober and a business-first affair.

Modi would often flaunt his close friendship with Trump, as five years ago, he had stood alongside him before a roaring Texas crowd, declaring in Hindi, “Abki baar, Trump sarkar” — This time, a Trump government.

The moment was controversial, and politically unprecedented — an Indian leader openly appearing to endorse a U.S. presidential candidate. This many said broke the unspoken rule of neutrality in foreign affairs.

But for Modi and Trump, it was par for the course. They had built an unlikely political camaraderie: two populist strongmen, masters of the spectacle, eager to position themselves as global disruptors.

Today, that carefully curated friendship lies in tatters.

With Trump now deep into his second term and recently imposing a punitive 50% tariff on Indian imports — ostensibly over New Delhi’s continued oil trade with Russia — the strategic bonhomie has turned into strategic backlash. India finds itself in Washington’s economic crosshairs, and Modi is suddenly on the defensive — not just diplomatically, but politically at home.

Modi and Trump’s relationship began with grand gestures. The 2019 “Howdy Modi” event in Houston drew over 50,000 Indian-Americans, with Trump using the opportunity to court the diaspora and tout his friendship with India.

In 2020, Trump reciprocated with a state visit to Ahmedabad — the “Namaste Trump” rally at Motera Stadium, attended by more than 100,000 people, set new records for political theatre.

Modi went beyond traditional diplomacy. In a highly unusual move, he praised a sitting U.S. president before an election, breaking the unspoken rule of neutrality in foreign affairs.

“The optics were dazzling, but the strategic substance was thin,” said Shivshankar Menon, former Indian National Security Adviser. “They bonded over style, not policy.”

Despite early warmth, trade irritants persisted throughout Trump’s first term. India refused to lower tariffs on agricultural products, resisted opening its e-commerce and data sectors, and remained wary of becoming a junior partner in Washington’s China containment strategy.

Trump, meanwhile, remained transactional. He viewed trade deficits as signs of betrayal and allies as deal partners, not ideological friends.

By 2024, India’s import of heavily discounted Russian crude oil — vital for keeping inflation in check — became a major sticking point. Trump’s advisors reportedly saw it as India “double-dealing” — benefiting from U.S. strategic goodwill while undermining U.S. sanctions against Russia.

“India is buying Russian oil at a discount while we pay the price of leadership,” Trump said at a rally last week. “That ends now.”

The recent 25% tariff hike, which came on top of an earlier 25%, was not just about oil — it was about control.

Trade volume

According to U.S. trade data, India exported around $81 billion worth of goods and services to the United States in 2024, making the U.S. India’s single largest export market. In the same year, India imported $110 billion worth of goods and services from the U.S., including high-end tech, defense equipment, crude oil, and aircraft components.

The bilateral trade volume of $191 billion represents a vital artery for Indian industries. Experts say the 50% tariff could result in up to a 40% drop in Indian exports to the U.S. unless rolled back or renegotiated.

Sectors likely to be hit hardest in India

According to experts in New Delhi, following sectors will take an immediate hit:

1. Textiles & Garments: India’s largest labor-intensive export to the U.S., now at risk due to price sensitivity.
2. Pharmaceuticals: Indian generic drugs dominate the U.S. market. Tariffs could make them less competitive.
3. Gems & Jewelry: Diamonds and gold jewelry exports to the U.S. account for over $10 billion annually.
4. Refined Petroleum Products: Including diesel and jet fuel shipped to the U.S., part of India’s re-export trade.
5. Machinery and Auto Components: Key for India’s engineering goods sector; tariffs could divert orders to Southeast Asia.
6. IT Services and Tech Support: Not directly hit by goods tariffs but vulnerable if the U.S. clamps down on work visas and tech outsourcing under broader trade pressure.

“We estimate job losses across several export hubs if this continues for more than a quarter,” said Ajay Sahai, DG of the Federation of Indian Export Organisations.

“The impact will be real — from Surat’s diamond traders to Tiruppur’s garment workers.”

Domestic blowback for Modi

For Prime Minister Modi, the tariff shock is not just an economic challenge — it’s a political embarrassment.

The opposition Congress party and regional leaders have seized the moment to question the BJP’s foreign policy. “Modi went all out for Trump, even campaigned for him,” said Congress leader Rahul Gandhi in Parliament. “Where has that friendship gone now? What did India gain?”

India’s average applied customs duty stands at 17.6%, compared to the global average of 6–8%. While designed to protect small farmers, manufacturers, and nascent industries, the tariff wall has long drawn criticism from the U.S.

“India talks about free trade but hides behind duties. You want access to our market, then open yours,” said U.S. Senator Tom Cotton, a known Trump ally.

India, however, defends its tariffs as necessary for social stability and economic sovereignty.

“We cannot open up completely like Europe or Japan — that would crush our domestic ecosystem,” said trade economist Biswajit Dhar. “But yes, the pressure to liberalize has grown.”

Foreign affairs experts in New Delhi say that despite the current chill, both sides have strategic reasons not to let the relationship collapse entirely. Defense cooperation continues. India remains a vital part of the Indo-Pacific framework, and the U.S. remains a key partner for technology transfers, energy, and immigration.

But the old romance is clearly over.

“Modi and Trump were never allies in the true strategic sense. They were co-performers in a global reality show,” said political analyst Pratap Bhanu Mehta writes in Indian Express.

“The moment one felt betrayed, the other became expendable.”

India is now accelerating talks with the European Union, UAE, and Southeast Asian nations to diversify its trade basket. Domestically, it’s pushing the “Atmanirbhar Bharat” (self-reliant India) campaign to boost domestic manufacturing and reduce dependence on American markets.

Still, the shadow of Trump looms large — and as his administration signals that visa restrictions and tech scrutiny could be next, India is bracing for a more volatile phase in the relationship.

As the Modi government scrambles for damage control, one lesson is clear: personal diplomacy has its limits.