Time to push back: On India and the continuing U.S. pressure

The United States has accused India of being among the top "enablers" of China's evasion of U.S. tariffs, according to a recent White House report. This claim is significant for India's economy, as a substantial portion of Indian manufacturing relies on Chinese imports. The U.S. suggests that India is importing Chinese goods, making minor modifications, and then exporting them to the U.S. at lower tariffs than what Chinese goods would face.

This practice is shifting from importing finished products with cosmetic changes to a greater emphasis on intermediate goods, which involves India doing its own assembly and manufacturing using Chinese and other countries' parts.

The U.S. has not yet imposed punitive actions based on its assessment of alleged Chinese tariff evasion. However, if it does, India must resist giving in to U.S. pressure. India's willingness to bow to U.S. demands is not new. During Donald Trump's first term, India reduced tariffs on high-end motorcycles from 60%-75% to 50%, and then further to 40% before trade talks even began.

India also cut import duties on shrimp feed and its components in the 2024 Budget, as requested by the U.S. These actions, driven by pressure like the 50% punitive tariffs, have led India to diversify away from Russian oil, despite claims of energy sovereignty and discounted oil prices. Russia's share in India's oil imports dropped below 20% in January 2026 after the U.S. imposed 50% tariffs in 2025.

India's concession to U.S. demands, such as allowing FDI in the e-commerce inventory model, shows a willingness to change long-held stances. While the U.S. can wield great pressure, India must start pushing back against these increasing demands.