Trump tariffs put India’s defence diversification to the test

On August 6, the Trump administration pushed India into a corner by doubling the already high tariffs on its exports to the US to a staggering 50 per cent. This move was intended as a punitive measure against India’s continued import of Russian oil amidst the ongoing war in Ukraine. Following New Delhi’s Foreign Ministry-level talks, Moscow offered to absorb Indian exports most vulnerable to Washington’s tariffs and raise discounts on its oil, while Beijing reopened border trade, direct flights, and pilgrimages with its rival neighbour.

Despite sparking widespread alarm, the tariffs are also seen as a strategic attempt to force India to open its markets to US agricultural exports. Nevertheless, India signalled its unwillingness to let its relations with Washington deteriorate further. As a gesture of goodwill, New Delhi suspended its 11 per cent tariffs on cotton imports by August 19 to support anxious textile exporters and reassure Washington — the world’s leading cotton exporter for over a century. Moreover, within a week of the announcement, India’s Foreign Secretary assured parliament that the tariffs would not affect the pipeline of military supplies, dismissing speculation that New Delhi intended to retaliate by pausing defence deals with the US.

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Strategic Stakes Behind Defence Trade

India’s decision to maintain the status quo is rooted in its steadily strengthened military-strategic partnership with the US. Ironically, these trade barriers emerged seven years after India secured the Strategic Trade Authorisation-1 (STA-1) status in August 2018, making it only the third Asian nation to be designated a “Major Defence Partner” of Washington.

This allowed the Modi government to welcome the US’s stakes in its bid to diversify its weapons basket, 60 per cent of which is traceable to Russia. Accordingly, India could secure a host of military items of US origin, including C-17, C-130, and P-8I aircrafts; Apache, Chinook, and MH-60R helicopters; M-777 howitzer guns; M-45 naval guns; M-54 torpedoes; and Stinger, Harpoon, and Hellfire missiles. US-supported entry into the elite Missile Technology Control Regime (MTCR) even enabled India to place an order for 31 MQ-9B Unmanned Aerial Vehicles (UAVs) in 2024.

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By 2024-25, the US accounted for 13 per cent of India’s weapons imports, ranking third after Russia and France. Washington’s broader strategic aim is to consolidate influence between the Arabian Sea and the Northern Pacific, countering China’s growing presence in the Indo-Pacific. This intent was reinforced by three key strategic pacts signed in 2016 to improve interoperability, data-sharing, and logistical access, the revival of the Quad alliance in 2018, and the symbolic rebranding of the US Pacific Command to the US Indo-Pacific Command. Even after the Ukraine war erupted in 2022, Washington allowed India to procure the Russian S-400 air defence systems without facing sanctions.

Flexible, Adaptive Diversification

The latest tariff dispute could compel India to rethink its defence procurement strategies. Even if New Delhi cushions the economic impact, its defence supply chains remain vulnerable. As the Trump administration subjects multiple global economies to tariff shocks, disruptions in production, supply chains, and technology transfers are possible. These could lead to delays in deliveries, rising costs, and equipment shortages — challenges India has historically faced in its US-based arms transactions.

One example is the F404 afterburner engine, essential for the Tejas Light Combat Aircraft (LCA) program. General Electric, its US manufacturer, has delivered only two out of 99 engines ordered in 2021 as of mid-2025, citing South Korean vendor-related supply hurdles. With the Indian Air Force (IAF) eager to expand its squadrons from 31 to 42, India has turned to France’s Safran for alternatives to the GE F414 engine intended for Tejas’ Mk2 variant.

This affirms the flexibility that the Modi government insists on for its capital spending on defence hardware. In another instance, initial delays and quality control  issues in India’s localised production of AK-203 assault rifles with Russian collaboration not only prompted New Delhi to  turn  to US-based SIG Sauer for urgent supplies, but also to permit India’s Adani Group to co-develop Israel’s AI-equipped Arad rifles. Likewise, India has maintained talks with UK-based Rolls Royce to co-develop an engine for its fifth-generation stealth fighter, the Advanced Medium Combat Aircraft (AMCA), while also refining its locally-birthed GTX-35VS  Kaveri  dry engine. As a spell of trade wars looms, such adaptiveness in its diversification for defence has now become even more crucial for New Delhi.

Local When Not Glocal

Complementing the rapid expansion of its defence import sources, the progress of home-grown high-technology like Kaveri is a fruit of India’s accelerated and inclusive push for aatmanirbharta – self-reliance – in efence production, led by a  restructuring of its military industry, the incentivising of private  participation, and the broadening of foreign  investments by the Modi government.

This firm resolve has yielded flagship  additions such as the Dhanush howitzers and advanced towed artillery guns; Akash air defence system; combat helicopters like Prachand and Rudra; Vishakhapatnam- and Kolkata-class destroyers; Arihant-class nuclear-powered submarines; an aircraft carrier, INS Vikrant; and  Agni- and  K-series ballistic missiles; along with a wide array of radar, avionics, software, and other auxiliaries. Further, in the last decade, India experienced an exponential 34-times  jump in its export of military products, shipping items ranging from boots to boats to over 100 countries.

If tariff hikes are to burden the global arms market, the Indian spirit of replacing the glocal with the local through enhanced R&D, focused localisations, multi-stakeholder collaborations, and expedited adoption shall be put to a test. Along with roping in accommodative partners for its acquisition needs, India must also bolster its ability to enhance and expedite the development of indigenous alternatives in the absence of conducive and capable exporters. This has already been demonstrated in the case of India’s Main Battle Tank (MBT) program, where it has channelised its energies to building the localised  DATRAN engine for its Arjun Mk1A MBT after the withdrawal of Germany’s MTU Friedrichschafen, owing to supply chain constraints of its own.

The Case for Guarded Optimism

As a goliath of the global weapons market, the US often arms friendly foreign clients with enthusiasm. This, though, has not always been applicable to India. Citing supply bottlenecks, Boeing managed to deliver three of the six Apache helicopters ordered in 2020 for the Indian Army last July. Earlier, the IAF’s 2015 order for 22 of these combat helicopters could only be completed  in 2020. The Indian Navy still  awaits  15 of the 24 MH-60R helicopters it had asked for in 2020. Conversely, the four Heron II UAVs  leased  by India from Israel in January 2021 got  inducted by November that year despite the Covid-19 pandemic. Whether encouraged by the latest tariffs or not, India’s recent expression of disinterest in the F-35 fifth-generation fighter jet pitched to it by the Trump administration may thus prove wise, as domestic delivery  delays over software and hardware hurdles have mired its manufacturer, Lockheed Martin.

Irrespective of how long they last, the ramifications of the Trump administration’s rumblings on trade are unpredictable for now. To insulate itself against potential delays, disruptions, or even distancing that may inadvertently—if not intentionally—affect India’s sensitive defence sector, New Delhi shall be better off pressing on with its need-based campaigns of diversification and aatmanirbharta, instead of waiting on bilateral assurances, concessions, or reconciliation from Washington.

During his February 2025 visit to Washington, Prime Minister Narendra Modi expressed hope that his vision to “Make India Great Again” would align with President Trump’s “Make America Great Again” agenda. However, if Washington persists with its “America First” trade stance, New Delhi may be compelled to adopt an “India First” realpolitik approach — ensuring its defence preparedness remains uncompromised.

Anubhav Roy is a Research Fellow, and Gaurav Kumar (X-https://x.com/gaurav15_isk) is a Research Assistant at the United Service Institution of India (USI), the country’s oldest defence think-tank. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.