Trump’s Accusations Over Tariff Hike and Oil Pact: PM Modi Holds Key Talks with UAE President as India Strategizes Its Economic Growth
U.S. President Donald Trump has announced a 25% tariff on Indian exports, sparking significant economic and diplomatic reactions. He further revealed a strategic partnership with Pakistan to build South Asia’s largest crude oil storage facility. In response, Indian Prime Minister Narendra Modi held a crucial discussion with the President of the United Arab Emirates (UAE), Sheikh Mohamed bin Zayed Al Nahyan.
25% Tariff on Indian Goods
Trump stated that starting August 1, a 25% tariff would be imposed on goods imported from India to the U.S. He added that India could also face additional penalties for purchasing weapons and crude oil from Russia. Copper and related products will attract a 50% tariff, according to a statement from the White House.
During FY 2024–25, India exported around $360 million worth of copper-related products to the U.S. With the new tariff, these products are expected to become more expensive in the American market, potentially hurting Indian exports.
Strategic Oil Alliance with Pakistan
On his social media platform, Trump revealed that the U.S. had signed a major agreement with Pakistan to establish South Asia’s largest crude oil storage hub. He said that oil companies were being shortlisted for the project and provocatively claimed that a day might come when India would import oil from Pakistan.
Modi-UAE Presidential Call
In light of these developments, PM Modi held a telephonic conversation with UAE President Sheikh Mohamed bin Zayed. According to sources, the leaders discussed strengthening bilateral cooperation, especially in strategic and trade sectors.
A statement from India’s central government noted that the UAE president congratulated Modi on becoming the second Indian PM to serve consecutive full terms. The call reportedly involved discussions on energy supply chains and strategic trade plans, with speculation that countermeasures to U.S. policies may also have been considered.
Clarification in Lok Sabha
In Parliament, opposition parties raised concerns about the U.S. tariff announcement. In response, Union Minister of Commerce and Industry Piyush Goyal said:
“India has moved from being the world’s 11th largest economy to the 5th largest today. This growth is due to the hard work of farmers, small and medium enterprises, large industries, and central government reforms.”
Goyal added that global institutions and financial experts now view India as a reliable economic partner. He assured the Lok Sabha that all necessary steps are being taken to protect national economic interests.
He further stated that multiple rounds of talks had already taken place with the U.S., with proposals for a 10–15% tariff currently being considered.
Upcoming Talks on August 25
A high-level U.S. delegation is scheduled to visit Delhi on August 25 to discuss the tariff issue. India’s top trade team will later travel to Washington for follow-up talks.
Key negotiators include Rajesh Agarwal from India and Brendan from the U.S. The first phase of a trade agreement is expected to be signed by October or November.
Hope from Precedent
In July, the U.S. imposed a 25% tariff on imports from South Korea, which was later reduced to 15% after bilateral talks. Indian officials are hopeful that a similar outcome will be achieved through diplomatic engagement.
