A report by global investment bank Jefferies states that the steep 50% tariffs imposed by the US on Indian goods are largely linked to US President Donald Trump’s frustration at not being allowed to mediate in the India-Pakistan conflict. He had reportedly hoped to play a role after the military clash between the two countries, following the deadly Pahalgam attack in May.
Trump’s ‘personal pique’ led to 50% tariffs on India, says Jefferies
“Tariffs are primarily the consequence of the American president’s personal pique that he was not allowed to play a role in seeking to end the long running acrimony between India and Pakistan,” the report said.
India has firmly maintained that disputes with Pakistan are bilateral and does not allow outside intervention, the report said. Jefferies noted that India stuck to this “red line” despite economic costs, which denied Trump an opportunity to boost his international profile and possibly seek recognition such as the Nobel Peace Prize.
Agriculture and wider geopolitical factors too played a role steep US tariffs
The report also highlighted agriculture as another sticking point amid the ongoing trade tension between the two countries. It said that the previous Indian governments, including the current one, have avoided opening the farm sector to imports due to the serious impact it would have on millions of people. Nearly 250 million farmers and workers depend on agriculture, which provides jobs to almost 40% of India’s workforce.
Jefferies further linked the tariffs to other wider issues, such as Trump’s failure to end the Ukraine war as promised and India’s continued purchase of Russian oil, which has raised concerns in Washington. However, the report said the central reason still remains India’s refusal to let Trump intervene in the Pakistan issue.
Warning for Washington
The analysis described the move as a policy misstep in Washington that goes against US national interests. It cautioned that pushing India away could drive it closer to China, especially with direct flights between the two countries set to resume in September after more than five years.