It was supposed to be a deal worth toasting.
But at the eleventh hour, US President Donald Trump had quite a change of heart and jammed the dagger in India's back. Starting Friday, Indian exporters will face a blanket 25% tariff plus penalties on exports to the US.
Further, Trump hinted at slapping even higher tariffs.
This wasn't expected.
India and the US were hopeful of striking a deal as recently as 10 minutes ago. If Trump hinted of a 'big' deal, the Indian side saw 'fantastic' progress. Behind the scenes though, as both sides continue to walk the diplomatic tightrope, the proposed deal lays fully drafted in the drawer.
What happens next is a roll of the dice, and the real victory is in simply arriving at the finish line.
Clearly, Trump is upset with India's increasing trade with Russia, be it energy purchases or defence procurement. In fact, the US Senate and House of Representatives has introduced the Russian Sanctions Act, 2025, and proposes to impose 500% duties on countries like India that buy oil or other petroleum products from Russia.
On its part, the government said it was studying the implications of the new tariffs, but insisted on concluding a 'fair, balanced and mutually beneficial bilateral trade agreement'.
But on social media, the unvoiced corollary is that Trump was miffed with Prime Minister Narendra Modi's remarks in Parliament on Wednesday discrediting the US' involvement in calling ceasefire with Pakistan last month.
Regardless of the reason, it's a fact that Indian exporters will face higher levies and given that the several rounds of negotiations were unsuccessful, we need to put more shovels in the ground.
What's surprising is that despite the bonhomie between Trump and Modi, and the seemingly better relations between both countries, they couldn't find a middle path. This, when the US managed to sign the dotted line with several other countries including the UK, Indonesia, Vietnam, Philippines, Japan and the European Union.
Analysts reason that most of these deals are not worth a rap, and were largely signed under US' pressure. For instance, Japan too resisted greater market access for American agricultural products to protect its local farmers, but eventually, gave in. It also committed substantial investments in the US in return for lower tariffs.
Likewise, it's an unequal deal with Vietnam too as US exports to Vietnam will remain tariff-free, while exports from Vietnam will face 20%-40% tariffs.
Amid all the trade pact overkill, New Delhi remained unfazed by the looming deadline. It hoped to safeguard the most politically and economically sensitive agriculture sector with the US, much like its recent trade deal with the UK.
Analysts also believe, India has a few bargaining chips in its negotiation arsenal and is also seeking trade deals with other countries that may give it leverage. Above all, India's total exports to the US are barely about 2%, which isn't as significant.
That said, the proposed tariffs are substantially higher than the average US tariff on most favoured nations when Trump took office at 3.3% on a simple average basis, according to estimates.
In all, Trump announced a 50% tariff on all copper imports, 25 per cent on imported cars and parts, and 50 per cent on imported steel and aluminium and signalled higher levies on the pharmaceutical sector, threatening a 200% tariff on drug imports after a transition period of one to one-and-a-half years.
If this happens, it may hit India hard. US is India’s largest pharmaceutical export market, accounting for 36.6% of the country’s drug exports, worth $9.8 billion between April, 2024 and February, 2025.
Lastly, he also threatened an additional 10% tariff on countries that align with the anti-American policies of BRICS, including attempts to take over the dollar through the creation of an alternative reserve currency.
All put together, the US President has ensured that many threats have been left hanging over India's head. The days ahead will let us know if he steps back and offers some respite to a country he began by referring to as 'our friend (with whom), we have, over the years done very little business'.
Among those following the action keenly will be people who have smsed TRUMP to 58161 to book an address at Trump Tower, Worli in India's Maximum City. The tagline there: 'There is only one way to live. The Trump way.' Is this what the world is now coming to?