U.S. President Donald Trump signaled the possibility of reducing tariffs on Indian goods as longtime ally Sergio Gor officially assumed his post as ambassador to India, marking a potential recalibration in U.S.-India relations strained by trade friction and geopolitical divergence over Russian oil imports.

A Shift Toward Trade Diplomacy

Speaking at Gor’s swearing-in ceremony on Monday, Trump indicated that his administration may soon lower tariffs, framing the move as a reward for India’s “substantial reduction” in purchases of Russian crude. “The tariffs on India are really high because of the Russian oil, but they have now substantially reduced those imports, so we will be bringing the tariffs down,” Trump said.

However, data from market tracker Kpler contradicts that claim. Indian imports of Russian crude were largely unchanged in October at 1.59 million barrels per day (mbd) from September, with early signals suggesting November shipments may remain elevated. Analysts warn that despite Trump’s remarks, Washington’s willingness to link trade policy directly to India’s energy sourcing may introduce new volatility into bilateral negotiations.

Trump said Gor’s agenda would focus on boosting U.S. investment and energy exports, as well as deepening defense cooperation with India. “I am looking at Sergio to strengthen one of our most important relationships,” he said, describing the appointment as a strategic step to reenergize U.S.-India ties amid broader global realignments.

A Political Appointment Aimed at Speed

Gor’s appointment — confirmed by the Senate on October 7 — represents a shift toward direct political diplomacy. Upon arrival in New Delhi, Gor met with Prime Minister Narendra Modi to discuss trade, technology, and the strategic importance of critical minerals, signaling early engagement on economic and security priorities.

“[This] suggests a desire to reach a trade deal sooner rather than later,” said Alexandra Hermann of Oxford Economics, noting that Gor’s “political rather than traditional diplomatic background” may accelerate negotiations but could also heighten risk. “If public opinion in either country turns, such direct channels can make the relationship more volatile,” she added.

The ambassador’s arrival also underscores Trump’s preference for personalized diplomacy, bypassing conventional diplomatic structures. Analysts say this approach could help unblock trade talks stalled over tariffs and visa restrictions but may also erode institutional buffers that typically stabilize long-term relations.

Strategic Friction and India’s Balancing Act

Relations between Washington and New Delhi have cooled in recent months amid disputes over tariff levels, visa fees, and differing geopolitical alignments. The U.S. imposed 50% tariffs on Indian exports in August, citing India’s continued imports of Russian crude and limited progress on market access for U.S. goods.

At a Chicago Council on Global Affairs event, former Reserve Bank of India Governor Raghuram Rajan criticized the imbalance between economic and security cooperation. “It can’t be that you are the most tariffed country in the world, more than even China, and then talk about military friendship,” he said. Rajan warned that such an approach risks repeating the diplomatic missteps of the 1971 U.S. tilt toward Pakistan, which drove India closer to the Soviet Union for decades.

India’s recent outreach to Russia — including participation by 20 Indian firms at the Moscow International Tool Expo — highlights New Delhi’s pragmatic balancing strategy. “Our engineering exports to Russia are growing rapidly,” said S.C. Ralhan, president of the Federation of Indian Export Organizations, predicting a record $1.75 billion in exports this year. Still, the trade imbalance remains stark: India imported $63.84 billion from Russia in FY2025 while exporting only $4.88 billion, compared to 18% of total exports going to the U.S.

Looking Ahead: Reset or Recalibration?

Trump’s signal of a possible tariff rollback offers a potential thaw in a relationship strained by economic and geopolitical contradictions. Yet analysts caution that with both nations navigating domestic political pressures — from Trump’s re-election calculus to Modi’s balancing of U.S. and Russian ties — substantive breakthroughs remain uncertain.

Gor’s success may depend on whether he can convert political proximity to Trump into tangible progress on trade and defense — without inflaming old tensions. For both Washington and New Delhi, the challenge lies in ensuring that strategic alignment does not get overshadowed by transactional politics.