India’s trade relationship with the United States has reached its lowest point in years, with New Delhi now subject to higher U.S. tariffs than Beijing — a striking reversal that experts say reflects a fundamental realignment of President Donald Trump’s foreign policy priorities.

The U.S. has imposed an effective 50% tariff on Indian exports, compared with an average 47% rate on Chinese goods following last week’s partial U.S.-China trade truce. The new measures — which include secondary duties on Indian oil purchases from Russia and steeper visa fees — mark a dramatic shift from the strategic courtship that once defined U.S.-India ties.

As the U.S. and China move toward renewed dialogue, Washington’s relationship with New Delhi appears to be cooling, raising questions about America’s long-term strategy in the Indo-Pacific region.

From Strategic Altruism to Transactionalism

For more than two decades, Washington viewed India as a critical democratic counterweight to China’s rise. But analysts now say that Trump’s second-term foreign policy has replaced that framework with what they call a “transactional” doctrine — one defined by immediate trade gains and unilateral pressure tactics, rather than shared strategic interests.

“President Trump evidently does not value India as a partner in balancing China as much as the previous presidents,” said Raymond Vickery Jr., senior associate at the Center for Strategic and International Studies (CSIS). “The approach toward India has shifted from one of strategic altruism to transactionalism.”

That shift has produced tangible costs. The $100,000 visa fees for H-1B applicants, punitive oil-related tariffs, and Trump’s public claims of “mediating” India-Pakistan tensions have undermined goodwill between the two governments. The rhetoric has also fueled political controversy at home: opposition leader Rahul Gandhi accused Prime Minister Narendra Modi of being “scared of President Trump,” calling the new tariffs “humiliating for India.”

U.S.-China Thaw Contrasts with India Strain

The timing of Washington’s renewed outreach to Beijing has not gone unnoticed in New Delhi. Following Trump’s meeting with President Xi Jinping in South Korea last Thursday, the two countries announced a partial tariff rollback, cutting duties on Chinese goods tied to fentanyl production to 10% from 20%.

In a social media post, Trump described the meeting as “a great one for both of our countries” that would lead to “everlasting peace and success.” Soon after, U.S. Defense Secretary Pete Hegseth confirmed that the two nations had agreed to establish military-to-military communication channels to “deconflict and deescalate” regional flashpoints.

The optics are clear: while U.S.-China relations appear to be stabilizing, the Washington-New Delhi dynamic has grown tense, particularly after Trump’s comments about threatening both India and Pakistan with “250% tariffs” to force an end to their April conflict over Kashmir.

“At the leader level, the chemistry is missing for now,” said Atman Trivedi, South Asia practice head at Albright Stonebridge Group. “The impact of this disconnect on the U.S.-India relationship probably cannot be overstated.”

Strategic Fallout and Economic Implications

Analysts say that the rift is not purely symbolic — it carries real geopolitical and economic consequences. Alexandra Hermann of Oxford Economics warned that a continued transactional approach could push India closer to Russia, China, or the Global South, undermining U.S. influence in Asia.

“The challenge for India is to balance between two economic superpowers,” Hermann said. “While New Delhi stands to benefit from greater access to U.S. demand, its dependence on China for intermediate goods and supply chains will remain significant.”

Yet there are still efforts to preserve cooperation where strategic interests align. On Friday, the two nations signed a 10-year “Framework for the U.S.-India Major Defense Partnership,” aimed at enhancing intelligence sharing, joint technology development, and Indo-Pacific naval coordination.

Defense Secretary Hegseth hailed the pact as a “critical pillar for maintaining a free and open Indo-Pacific,” while India’s Defense Minister Rajnath Singh said the agreement reaffirmed mutual commitment to regional stability.

Still, analysts caution that defense ties alone cannot offset the economic distrust now defining the bilateral relationship.

The Road Ahead: Realignment or Rift?

For now, India’s higher tariffs symbolize more than a trade dispute — they signal the erosion of what was once a cornerstone partnership of U.S. strategy in Asia. As Trump doubles down on bilateral trade leverage and cost-sharing demands, India is likely to hedge its bets by diversifying alliances and deepening South-South economic links.

“The Trump policy will push India further toward Russia, the Global South, and even China,” warned CSIS’s Vickery. “This will not be in the interests of either India or the U.S.”

With the U.S. resetting relations with Beijing and the Indo-U.S. relationship in flux, the world’s largest democracy may soon find itself redefining its place in an increasingly transactional global order — one where tariffs, not trust, set the tone of diplomacy.