President Trump's order to impose 50 percent tariffs on Indian imports to the United States took effect on Wednesday. The White House officials linked the move to both trade disputes and wider geopolitical tensions.

US National Economic Council director Kevin Hassett described the India-US relationship as “complicated,” citing India’s “intransigence” in opening its markets to American goods and its continued purchase of Russian oil.

"I think it's a complicated relationship. Part of it has been tied to the pressure we've been trying to put on Russia in order to secure a peace deal and save millions of lives. And then there's the Indian intransigence about opening their markets to our products," stated an ANI report quoting Hassett.

President Donald Trump’s Executive Order 14329 issued on August 26 announced the tariff hike in a notice from the US Customs and Border Protection. The order raised duties on Indian goods by an additional 25 percent, bringing the total to 50 percent.

Hassett compared the trade talks to a marathon, noting that they require patience, a longterm outlook, and the recognition that there will be “ebbs and flows” before an agreement is reached.

"When you look at trade negotiations, one lesson we've all learnt is that you need to keep your eyes on the horizon and recognise that there are going to be ebbs and flows before we reach the final position," he said.

He also hinted at a tougher approach from Trump if India refuses to yield, “and if the Indians don’t budge, I don’t think President Trump will need it,” he said, suggesting the possibility of escalation.

India’s growth is driven mainly by domestic consumption rather than exports, making consumer and business sentiment central to sustaining momentum. While the United States is India’s largest export market, with shipments worth $ 87.4 billion in 2024, it accounts for only about 2 percent of India’s GDP compared with private consumption, which makes up nearly 60 percent.

Having asserted its “red lines” in trade negotiations with the US, particularly its right to protect national interests and maintain strategic autonomy in buying Russian crude, India is now moving to offset the impact of higher American tariffs. The government is speeding up policy measures, including GST restructuring, to reinforce economic confidence and maintain growth.