US-India tariff tug-of-war: Strategic window for Korea

U.S.-India relations, established in 1947, have evolved from India’s Cold War policy of nonalignment into today’s broad-based strategic partnership spanning defense, technology and the Indo-Pacific.

A pivotal shift came in 1991, when India’s economic reforms opened its markets to foreign investment. Within years, the U.S. had emerged as one of India’s top trading partners. Yet alongside cooperation, trade frictions have remained an undercurrent.

From strategic cooperation to policy friction

Across successive administrations, ties have deepened, from Bill Clinton’s reset to Joe Biden’s Quad Leaders' Summits. Milestones included the 2008 Civil Nuclear Agreement, the 2015 Indo-Pacific vision and India’s designation as a Major Defense Partner.

However, trade disputes persisted. In 2019, Washington revoked India’s preferential trade status under the Generalized System of Preferences program. In 2025, relations were jolted after India’s “Operation Sindoor” struck a Pakistan-based terror camp. President Donald Trump’s offer to mediate with Islamabad — while hosting Pakistan’s army chief at the White House — unsettled New Delhi.

Soon after, the Trump administration doubled tariffs on Indian goods from 25 percent to 50 percent, citing India’s continued purchase of Russian oil. The rationale appeared selective: China and the EU imported far more Russian energy, while the U.S. itself maintained significant trade with Moscow.

Such measures risked casting India not as a partner but as a pressure point.

Structural differences vs trade balances

Trade deficits are less about weakness than structural disparities. The U.S. dominates high-margin sectors such as software, defense and finance, while India remains more reliant on agriculture and basic manufacturing. Agriculture, which supports 46 percent of India’s population and nearly 70 percent of rural households, is not just an economic sector but a lifeline. Tariffs in this domain strike at people's livelihoods and domestic stability, making them especially sensitive.

India has leaned on the World Trade Organization's remedies and dialogue, favoring cooperative solutions. At the same time, tariff pressures open space for supply-chain realignments, testing whether strategic trust can endure economic turbulence.

Strategic window for Korea

This turbulence creates a strategic opening for Korea. India, China and Russia together account for a quarter of global GDP; add Seoul and Tokyo, and the figure nears one-third. India-Korea ties have already advanced from the 2010 CEPA trade pact to the 2015 Special Strategic Partnership, broadening into defense, technology and Indo-Pacific cooperation. Seoul’s earlier pivot to China for growth — despite relying on the U.S. for security — offers a revealing precedent.

Today, tariff-driven supply-chain shifts are nudging Korea to expand in India. Korean electronics production is rising, while global firms like Apple scale operations in India — underscoring its role as a hub for diversification.

Resilience and the way forward

The U.S. retains resilience through dollar dominance, deep markets and innovation. India’s resilience rests on its vast domestic demand, flexible policies and pursuit of geo-economic self-reliance. Fiscal reforms, credit rating improvements and defense manufacturing can further consolidate this base. For Washington, inclusive trade policies with developing nations could ease frictions, strengthen Indo-Pacific credibility and reaffirm its role as a trusted partner. For India, the U.S. remains a time-tested democracy with space for negotiation and trust — unlike China, where geostrategic realities limit alignment.

Ultimately, tariffs may spark turbulence, but the U.S.-India partnership is too strategic to derail. And for Korea, this turbulence offers a timely window to deepen ties with New Delhi in a shifting global order.

Shashi B. Bharti (bharti.jnuin@gmail.com) writes at the intersection of international strategy and global thought traditions.